U.S. Treasury Secretary Janet Yellen recently stressed the significance of maintaining a constructive and fair economic relationship between the United States and China.
Speaking at Johns Hopkins University, Yellen warned against the potentially disastrous consequences of any effort to decouple the two nations’ economies, which could prove destabilizing for the rest of the world.
Balancing national security and economic growth
Yellen noted that while the U.S. has implemented targeted national security measures against China, these actions are not intended to undermine Chinese economic growth.
She emphasized that the U.S. would assert itself when its vital interests were at stake but did not seek to completely separate its economy from China’s.
The US will assert itself when its vital interests are at stake, Yellen said, adding that however, they do not seek to ‘decouple’ their economy from China’s.
A full separation of our economies would be disastrous for both countries. It would be destabilizing for the rest of the world.
Janet Yellen
Yellen also urged cooperation between the two nations on macroeconomic issues and climate change. She said that the Biden administration believed the two countries could manage their economic relationship responsibly, but their ability to work together to drive global economic progress would depend on how both nations acted in the coming years.
Addressing U.S. concerns and strengthening ties
Despite Yellen’s call for a healthy economic relationship, her speech also highlighted US concerns regarding China’s policies and actions.
She stated that the U.S. would continue to partner with allies to resist China’s unfair economic policies and secure its national security interests. Yellen emphasized that safeguarding certain technologies from the Chinese military was of “vital national interest.”
Yellen reassured China that the U.S.’s targeted actions were motivated solely by concerns about security and values, not to gain competitive economic advantage.
Even as our targeted actions may have economic impacts, they are motivated solely by our concerns about our security and values. Our goal is not to use these tools to gain competitive economic advantage.
Janey Yellen
Yellen also touched upon human rights issues, stating that the U.S. would not compromise on them. She expressed concern about China’s “no limits” partnership with Russia and its implications for the ongoing war in Ukraine.
Moreover, Yellen criticized China’s decision to pivot away from market reforms in recent years, which she said had “undercut its neighbors and countries across the world.”
She added, “China is striking a more confrontational posture towards the United States and our allies and partners — not only in the Indo-Pacific but also in Europe and other regions.”
Yellen called on China to work with Washington to help emerging markets and developing countries facing debt issues. She said that China’s participation was essential to meaningful debt relief, but it had not moved in a comprehensive and timely manner, serving as a roadblock to necessary action.
Despite the criticisms in her speech, Yellen said she planned to travel to China “at the appropriate time.” She emphasized the importance of frank discussions about difficult issues and expressed hope for a way forward if China was willing to play its part.
