Will Janet Yellen be able to mend US-China ties during visit?

Ties between the United States and China are fraught and unstable, with the world economy at risk. Amid these tensions, US Treasury Secretary Janet Yellen will make her way to Beijing – she will be in China from 6 July to 9 July – with the hope that she can turn around the dire situation. Notably, her visit comes just days after Beijing made the abrupt announcement of controls on exports of some gallium and germanium products widely used in semiconductors as well as a new counterespionage law, both seen as potentially harmful to US firms. What exactly does Yellen hope to achieve from her visit? Will she be able to play good cop and help restore ties with Beijing? Yellen’s long-overdue trip to China US Treasury Secretary Janet Yellen’s first visit to China as part of the Joe Biden administration comes after a long wait. The COVID-19 pandemic, followed by diplomatic disputes and even that infamous ‘spy balloon episode pushed back Yellen’s Beijing visit. Scott Kennedy, a specialist in US-China economic relations at the Center for Strategic and International Studies, said the trip was “long overdue.” Not much is known about who she will meet, but a Treasury official told journalists that she would be meeting senior Chinese officials. A second administration official told the Reuters news agency that Yellen was expected to meet the Chinese vice premier He Lifeng. Interestingly, Yellen’s visit to China comes just weeks after US Secretary of State Antony Blinken met China’s president Xi Jinping, leading diplomat Wang Yi and Foreign Minister Qin Gang in Beijing. Blinken, the highest-ranking US official to visit the Asian nation in nearly five years, was able to reach an agreement with the Chinese leader to stabilise ties and ensure that the rivalry did not escalate. In fact, at the end of his visit, Blinken had been quoted as saying that while there were still major issues between the countries, his “hope and expectation is we will have better communications, better engagement going forward.” [caption id=“attachment_12834302” align=“alignnone” width=“640”] Janet Yellen’s visit to China follows US Secretary of State Antony Blinken’s trip to Beijing where he also met with Xi Jinping. File image/Reuters[/caption] Yellen’s China agenda Geopolitical and economic experts are hoping that Yellen’s visit to China helps in mending ties between the two nations. The trip is a push by the Joe Biden administration to deepen communications between the world’s two largest economies. As a senior Treasury official was quoted as saying, “We seek a healthy economic relationship with China, one that fosters growth and innovation in both countries. We do not seek to decouple our economies. A full cessation of trade and investment would be destabilising for both our countries and the global economy.” And in an attempt to warm up ties, Yellen on Monday met with Xie Feng, China’s ambassador to the United States and laid out “issues of concern” in what the Treasury Department described as a frank conversation. A report published by the South China Morning Post stated that Yellen is likely to discuss the Federal Reserve’s interest rate increases and the yuan ’s weakness, among other bilateral and global issues with Chinese leaders. She will also discuss “areas of concern,” like documented allegations of human rights abuses and ways to responsibly manage competition between the two powers, as well as areas where they can work together on global challenges like climate change, the official said. Tim Adams, the president of the Institute of International Finance and a former Treasury undersecretary for international affairs was quoted as telling The New York Times, “I think she is going to go as the sober voice of reason to say this is not about containment. It’s really about setting the tone of cooperation and showing that the US remains interested in being engaged with China on trade and investment.” Edward Alden, a senior fellow at the Council on Foreign Relations (CFR) told AFP: “I think the US government is clearly trying to put some floor under the deterioration of the economic relationship.” A Yellen trip could “restart a steady pattern of engagement at lower levels”, he said. [caption id=“attachment_12834282” align=“alignnone” width=“640”] US president Joe Biden with Chinese president Xi Jinping on the sidelines of the G20 leaders’ summit in Bali last year. This was the last time they both met. One report said that Yellen’s visit was to pave way for Xi’s visit to Washington. File image/Reuters[/caption] Politico reported that Yellen’s trip could help smooth the way for Xi to visit the United States in November, when Biden will host the annual Asia-Pacific Economic Cooperation leaders summit in San Francisco. But those hoping for significant breakthroughs should temper their hopes. Treasury officials have said that they don’t expect any diplomatic breakthroughs and indicated that her visit is aimed at improving communications. Wendy Cutler, vice president at US-based think tank the Asia Society Policy Institute, voiced similar sentiments. Speaking to the BBC, she said, “Expectations should be kept low for the Yellen visit. She is not in a position to neither repair ties nor respond to Chinese requests to lift export controls or tariffs.”

US-China ties on downturn The US-China relations have taken a nosedive in recent times over a number of issues; there’s been the matter of the origins of the COVID-19 pandemic to the issue of the abuses against Muslim Uyghurs in the Xinjiang area. Former US House Speaker Nancy Pelosi’s visit to Taiwan in August last year was also another issue that caused a deterioration of relations between the two countries. And then came the matter of the shooting down of the alleged Chinese spy balloon floating over the US in February, which exacerbated tensions. This specific incident even led to Blinken’s visit to China being differed. Last month, US president Joe Biden compared China’s Xi to dictators at a political fundraiser. At the event, Biden had said, “The reason why Xi Jinping got very upset, in terms of when I shot that balloon down with two box cars full of spy equipment in it, was he didn’t know it was there. That’s a great embarrassment for dictators. When they didn’t know what happened.” China quickly reacted to the president’s remarks, calling them “extremely absurd and irresponsible”. Speaking at a regularly scheduled press conference, China’s foreign ministry spokeswoman had said that the comments were “an open political provocation” that violated diplomatic etiquette. Apart from the remarks, there’s also the matter of the trade tariffs imposed on China under the Donald Trump administration. Additionally, the Biden administration has imposed strict export controls on advanced semiconductors and the machinery used to make them because of concern over potential Chinese military applications. Another sticking point is the amendments to China’s anti-espionage law, which recently broadened the definition of spying while banning the transfer of information relating to national security – a move that has spooked foreign and domestic businesses. It is left to be seen if Yellen’s China visit will be an ‘empty one’ as Derek Scissors, a senior fellow at the American Enterprise Institute told Reuters, or will it yield some positive results? With inputs from agencies