As part of risky efforts to mend fences between the two largest economies in the world, US Treasury Secretary Janet Yellen has landed in China.
A senior Washington official is in Beijing for the second time in as many months following a deterioration in their relationship earlier this year.
Additionally, the visit occurred just a few days after Beijing declared it would restrict exports of two crucial components used to create computer chips.
She will have her first conversations with China’s new Vice Premier, He Lifeng, during the trip, and Ms. Yellen’s recent remarks that the two economies can coexist may be significant.
The US emphasized the need for the nations “to responsibly manage our relationship, communicate directly about areas of concern, and work together to address global challenges” prior to the visit.
Ms Yellen also had a “frank and productive discussion” with China’s ambassador to the US, Xie Feng, on Monday as part of continued attempts to reduce tensions.
However, Wendy Cutler, vice president of the US-based Asia Society Policy Institute, advised the BBC that “expectations should be kept low for the Yellen visit.” She is unable to mend fences or comply with Chinese efforts to remove export restrictions or taxes.
Following US Secretary of State Antony Blinken’s recent visit to Beijing, where he visited President Xi Jinping and Foreign Minister Qin Gang, this latest journey to China was made.
The last high-ranking Washington official to visit the Chinese capital in nearly five years was Mr. Blinken.
The meetings were viewed as a crucial test to determine whether the two nations could prevent their relationship from getting worse.
Although there are still significant problems between the US and China, Mr. Blinken stated at the conclusion of his tour that he “hopes and expects we will have better communications, better engagement going forward.”
However, President Joe Biden’s description of Mr. Xi as a “dictator” the next day sparked outrage from Beijing. Although analysts claimed Mr Biden’s remark was unlikely to have a significant negative impact, it was also widely perceived as making matters worse.
China this week stated it was increasing controls over exports of two minerals essential to creating computer chips, providing yet another indication that the trade spat between the two countries is far from being settled. As in the next month, exports of gallium and germanium from China, the world’s largest producer of these metals, will require special licenses.
The action comes in response to Washington’s attempts over the previous year to limit Chinese access to some cutting-edge computer processors. No matter where in the globe the chips are produced, Washington stated in October that it would want licenses from businesses exporting them to China using US equipment or software.
According to Priyanka Kishore from the business group IMA Asia, the US and China are grappling with a complicated range of concerns.
“The official rhetoric and visits by senior diplomats indicate a desire to establish a working political relationship between the two countries,” she continued. But the tit-for-tat policies seem to be in control, as seen by the acts.
Ms Yellen is anticipated to make it clear that the US would continue to protect both its national security interests and human rights during conversations with her counterparts in Beijing.
She is anticipated to also stress Washington’s readiness to collaborate with Beijing on matters like climate change and the difficulties faced by nations with high levels of debt.
While some prominent individuals have demanded that the US fully sever its economic connections with China, Ms. Yellen will adopt a more conciliatory stance. She is anticipated to inform her Chinese counterparts that Washington has no plans to separate the two economies.
This is consistent with her philosophy, which she described in a speech earlier this year and which is more globalized than some of her predecessors: “A full split of our economy would be devastating for both countries. Destabilization of the rest of the world would result.
Former International Monetary Fund chief economist Ken Rogoff told the BBC, “I would say it’s a little bit like good cop, bad cop, with Blinken being the bad cop.”
And now Yellen is attempting to act like the good cop by saying, “Look, you know, we have a lot in common. Let’s see what we can accomplish collectively, he said.
According to Mr. Rogoff, Mr. Blinken had to bring up several challenging matters in his capacity as secretary of state, including Taiwan and Ukraine.
Mr Rogoff emphasized that this shouldn’t be interpreted as an indication that Ms Yellen will be kind toward Beijing since she is likely to challenge Chinese leaders on a variety of matters, such as intellectual property laws and market access.
Additionally, despite claims to the contrary made by some individuals on both sides of the US-China rift, the interdependence between the two countries can be observed in trading statistics.
For the third year in a row, trade between the two nations increased in 2022. According to official statistics, China sold more than $536 billion (£422.3 billion) worth of commodities to the US last year, while $154 billion worth of goods went the opposite way.
“I anticipate many of the trade sanctions and tariffs enacted under the Trump administration to be loosened on the economic front if a second Biden administration takes office after 2024, particularly those that are less connected to high technology sectors,” said Professor Eric Harwit of the Department of Asian Studies at the University of Hawaii.
“However, all bets are off if Donald Trump wins the 2024 election.”
