U.S. Treasury Secretary Janet Yellen lays out 2024 strategy for U.S.-China economic relations during speech
Yellen shared her strategic plans to enhance U.S.-China economic relations during an evening address to business leaders, revealing priorities such as:
- Enhancing communication between the two largest global economies
- Encouraging more transparency from Beijing
- Strengthening regulatory collaboration
- Addressing complex issues, like terrorism financing and Fentanyl flows
As revealed in excerpts of her speech, published first by CNN, Yellen made these comments at a 50th anniversary gala for the U.S.-China Business Council in Washington. This marks the first time she's publicly detailed her economic plans for a potential 2024 U.S.-China relationship.
U.S.-China relations, considered the planet's most significant bilateral relationship, look set to improve by year's end—a stark contrast to their bleak beginning in February, when Biden ordered the shootdown of a Chinese spy balloon [1].
Tensions have eased in recent months, paving the way for high-level visits from U.S. officials, including Yellen and Secretary of State Antony Blinken, as well as a four-hour meeting between Biden and Chinese President Xi Jinping last month [2].
US officials now aim to build on this momentum. A well-informed source shared with CNN that Yellen expects to return to China in the first half of 2024 as a sign of her approval of current advancements [1]. However, her return plans are still under consideration.
During her address, Yellen explained, "Our goal isn't to solve every disagreement or avoid all shocks. That's unrealistic, but our goal is to make our communication resilient, so shocks will not escalate into misunderstandings causing harm [2]."
Current status
Rumors of a real estate crisis in China, impacting its economic growth, have investors on edge. China, the world's second-largest economy, plays a critical role in the global growth.
Yellen aims to press China on understanding how authorities address pressing issues, particularly when they worsen.
Negotiations with China on business and financial market concerns have resumed earlier this month. In a recent remark to CNN, Yellen expressed excitement about the possibility of visiting China in 2024 [1].
However, she admitted that challenges still exist in U.S.-China relations.
"We know that this relationship will face ongoing challenges," Yellen said. "The United States and China have differing views in many areas. The risk of shocks affecting both countries is always present [2]."
Yellen further suggested that U.S. officials will continue to impose restrictions on Chinese foreign investments and exert pressure in national security matters.
"Stabilizing our relationship to prevent an escalation will not be groundbreaking news." Yellen stated. "But our economy, our people—and economies and people worldwide—will be safer [2]."
Reaction to Yellen's speech comes only days after the House Select Committee on China revealed a report outlining a bipartisan strategy to fundamentally reshape U.S.-China relations.
The report highlighted the poor current state of interactions, emphasizing the need to readjust China's economic policies in alignment with U.S. interests, focusing on economic and national security [2].
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Additional Insights
Yellen's plans for improving U.S.-China economic relations primarily center around addressing issues of overcapacity and market distortion in China, resulting from its national underwriting for energy and other companies [1]. She stressed the negative impact of excess capacity on the global economy and the welfare of U.S. workers and businesses.
Furthermore, Yellen emphasized the need for ensuring that China's economic policies do not pose risks to the global economy, including the productivity and growth of the Chinese economy itself. These broader goals reflect a push to promote fair trade practices and address structural issues in China's economic policies affecting global markets [1]. However, the provided sources do not detail specific actions or negotiations.
[1] Stephens, C. (2023, December 14). . CNN. [2] Momtazi, M., & Diamond, M. (2023, December 16). . CNN.
