IMPROVING COMMUNICATION
Yellen is expected to focus on economic issues, but she will remind Chinese counterparts that any move to supply lethal aid to Russia – in violation of sanctions on Russia over its war in Ukraine – could trigger sanctions on Chinese entities, one senior administration official said.
“We routinely hear Chinese assurances that they will not deliver lethal assistance. We are holding them to that, and we’ll continue to watch,” the official said.
The US believes China is unnerved by last month’s mutiny by Russia’s Wagner mercenary group and the weakness of the Russian military, the official said, but Beijing relies on a stable Russia for food and fuel.
Both Blinken and Yellen’s visits are seen as critical to improving communication after the US military shot down a Chinese spy balloon over the United States, and ahead of a possible meeting between President Joe Biden and Xi at the Asia-Pacific Economic Cooperation meeting in San Francisco in November.
“Secretary Yellen’s trip is more than a step toward preparation for a potential Biden-Xi meeting at APEC. The top economic officials of the world’s two largest economies have barely spoken to each other in over three years, and that is dangerous for the global economy,” said Scott Kennedy with the Center for Strategic and International Studies.
TRADE TARIFFS REMAIN
National Foreign Trade Council President Jake Colvin said the trip could help define a “new normal” and establish a floor under the bilateral relationship. But it won’t end US$360 billion in tariffs imposed under former President Donald Trump, or export controls that have gathered steam under Biden.
Despite the cooling relations, trade between the US and China grew in 2022 for the third year in a row, US Commerce Department data show.
“There’s still opportunity in China for American businesses, farmers and workers,” Colvin said.
“We can’t just be looking at this exclusively through the lens of de-risking.”
Yellen will emphasise the need to work with Beijing on climate change, pandemic preparedness and debt distress, even as Washington continues to take targeted actions over human rights or security concerns, a senior Treasury official said.
She will tell her Chinese counterparts that Washington is not seeking to decouple the two economies, which together account for 40 per cent of global economic output, while reserving the right to protect human rights and US national security interests through targeted actions, the official added.
Yellen will meet for the first time with China’s new Vice Premier He Lifeng, after seeing his predecessor, Liu He, in Zurich in January, one administration official said, predicting a different dynamic with the new vice premier, a Xi loyalist who is less comfortable in English and hails from a planning background, not finance and economics. “I would suspect it will be more formal,” the official said.
Two other Cabinet secretaries, Commerce chief Raimondo and US Trade Representative Katherine Tai, met in May with Chinese Commerce Minister Wang Wentao. US officials are also hoping to expand economic communication channels below the Cabinet level.
