Treasury Secretary Janet Yellen arrived in China for a five-day visit to discuss various issues with Chinese officials. There are tensions between the two nations over Chinese government support for the manufacturing of electric vehicles and solar panels, as well as differences in trade, ownership of TikTok, access to computer chips, and national security. Yellen intends to raise these concerns with her Chinese counterparts, including Vice Premier He Lifeng and Chinese Central Bank Governor Pan Gongsheng, among others. The visit comes after a call between U.S. President Joe Biden and Chinese President Xi Jinping, aimed at renewing dialogue between the two countries.
During the visit, Yellen accused China of flooding global markets with heavily subsidized green energy products, potentially undercutting subsidies provided by the U.S. for its own renewable energy and EV sectors. She emphasized the need for a level playing field and expressed concerns about China’s massive investments in these industries leading to overcapacity. Yellen’s trip follows Biden’s executive order last year to monitor U.S. investment in China’s high-tech manufacturing closely. Despite efforts to stabilize the relationship, unresolved issues between the two nations may continue to challenge their relationship in the future.
China’s expansion in the global economy over the past two decades has had a significant impact on trade, with the export of cheap goods affecting U.S. consumers and factory jobs. Some experts see the potential for an economic showdown to produce green products as beneficial, as it could lead to more climate-friendly products being accessible to consumers in both countries. Yellen’s visit aims to build on previous economic working groups established between the two nations’ finance departments to ease tensions and deepen ties. However, the upcoming U.S. election may contribute to sharper rhetoric on issues related to China, such as Chinese ownership of TikTok and concerns over cybersecurity.
Yellen’s discussions during her visit will also address China’s support for Russia amidst its invasion of Ukraine, as the U.S. and its allies impose sanctions on Russian officials and sectors. The increase in trade between China and Russia amid these sanctions adds another layer of complexity to the relationship between the U.S. and China. Despite growing competition between the two nations, Yellen emphasized that the U.S. has no interest in decoupling from China, highlighting the importance of their economic relationship and mutual dependency. The visit comes as both countries navigate a delicate balance between competition and cooperation across various economic and geopolitical issues.
