Yellen Calls for ‘Constructive’ US-China Economic Ties and Warns on Sanctions Evasion – The United States welcomes “constructive and fair” economic connections with China, but will safeguard its national security interests and oppose Chinese efforts to control international competitors, Treasury Secretary Janet Yellen said on Thursday.
Speaking at Johns Hopkins University’s School of Advanced International Studies, Yellen laid out the Biden administration’s principal objectives for what she called an “essential” economic relationship between the world’s two largest economies, as China strikes a more confrontational posture toward the United States and its allies.
“Our relationship is clearly at a tense moment,” noted Yellen, who has said she still hopes to visit Beijing to meet with her new Chinese economic counterparts. “My goal is to be clear and honest, to cut through the noise and speak to this essential relationship, based on sober realities.”
The former Federal Reserve chairman stated that the United States remained the world’s largest and most dynamic economy, leading in areas ranging from wealth to technical innovation, and that a growing China was in both countries’ interests as long as it obeyed global laws.
She took aim at China’s “no limits” partnership with Russia, calling it “a worrisome indication that it is not serious” about ending Russia’s war against Ukraine. “It is essential that China and other countries do not provide Russia with material support or assistance with sanctions evasion,” she said, warning that the consequences of any violations would be “severe.”
Yellen stated that the Biden administration’s economic priorities on China include preserving the United States’ national security interests, creating “healthy” competition, and working on global issues such as climate change, debt reduction, and macroeconomic stability, where practicable.
However, Washington would express its concerns about China’s increased support for state-owned enterprises and domestic private firms in their efforts to dominate foreign competitors, as well as its “aggressive” efforts to acquire new know-how, including through intellectual property theft and “other illicit means.”
“We will not hesitate to defend our vital interests,” she added, emphasizing that Washington’s moves against China were entirely motivated by worries about US security and values, rather than gaining a competitive economic advantage.
She stated that Washington will not budge on these concerns, even if it meant making trade-offs with US economic interests.
At the same time, she stated that the Biden administration was not looking for a “winner-take-all” rivalry, but rather believed that healthy economic competition governed by a fair set of standards might benefit both countries in the long run. “Sports teams perform at a higher level when they consistently face top rivals. Firms produce better and cheaper goods when they compete for consumers,” she said.
She also asked China to follow through on its promise to collaborate with the US on macroeconomic difficulties and pressing global challenges such as climate change and debt crisis. “More needs to be done,” Yellen said. “We call on China to follow through on its promise to work with us on these issues – not as a favor to us, but out of our joint duty and obligation to the world.”