Yellen strengthens US-China relationships amidst rocky starts- July 2023
The US Treasury head’s 4 day trip to China has been the latest effort to stabilise fractious US-China relations with a few breakthroughs amid ongoing disputes over technology, security and tension between the world’s two largest economies. Yellen has made it clear to China-based US leaders that ‘the United States does not seek a separation of our economies’ and stressed the need for cooperation in her talks with Chinese Premier Li Qiang. Whilst there was an optimistic tone in the possibility of improving relationships, in advance of the November agreement between Joe Biden and Xi Jinping, the countries offered little in way of tangible steps to resolve ongoing disputes.
In her meeting with Li, Yellen defended ‘targeted actions’ taken by the US, an apparent reference to curbs on Chinese access to advanced processor chips and other technology that has increasingly become a sticking point for Beijing. Yellen said such measures are done solely in the name of national security and not to stifle Chinese advancement. She further raised complaints from US companies about Beijing stepping up its use of protectionism to protect Chinese companies such as subsidies as market barriers.
It is evident that the two countries have misaligned and competing strategic interests, and the relationship is at its lowest point in decades, marked by palpable and mutual distrust, but there could be a glimmer of hope of a turning point just beyond the horizon.