WASHINGTON :The U.S. seeks “constructive and fair” economic ties with China, but will protect its national security interests and push back against Chinese actions to dominate foreign 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 chief said the United States remained the world’s largest and most dynamic economy, leading in areas ranging from wealth to technological innovation, and believed a growing China was in the interest of both countries, as long as it followed global rules.
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 said the Biden administration’s economic priorities on China included securing U.S. national security interests, fostering “healthy” competition and cooperating, where possible, on global issues such as climate change, debt relief and macroeconomic stability.
But Washington would also clearly communicate its concerns about China’s increased support for state-owned enterprises and domestic private firms 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 said, underscoring that Washington’s actions against China were motivated solely by concerns about U.S. security and values, and the goal was not to gain a competitive economic advantage.
She said Washington would not compromise on those concerns, even when they forced trade-offs with U.S. economic interests.
At the same time, she said the Biden administration was not seeking a “winner-take-all” competition, and believed that healthy economic competition with a fair set of rules could benefit both countries over time.
“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 urged China to make good on its vow to work with the United States on macroeconomic issues and urgent global challenges such as climate change and debt distress.
“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.”