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Foreign Policy

Yellen Visit Provides Stabilizing Force, But …

Apr 12, 2024
  • Yu Xiang

    Senior Fellow, China Construction Bank Research Institute


U.S. Treasury Secretary Janet Yellen speaks at a news conference in Beijing during her three-day visit to China.

U.S. Treasury Secretary Janet Yellen was in China from April 4 to 9— her second visit since July. She is the first current senior U.S. official to visit this year.

Based on the itinerary and the specifics of the discussions held, the visit can be deemed a success.

First, the schedule was densely packed and rich in content. Yellen’s stops in Guangzhou and Beijing involved interactions with a wide range of domestic and international figures, listening to their views on the business environment and future prospects and obtaining firsthand, authentic information. Additionally, she delivered speeches on various occasions, clearly conveying the stance of the United States.

Second, the topics of discussion were broad. During her visit, Yellen engaged in in-depth talks with high-level Chinese officials, the American Chamber of Commerce, students and economic experts on topics such as China’s economic outlook, debt restructuring, combating money laundering and financial stability. She gained a comprehensive and profound understanding of China.

Third, not only were America’s concerns explicitly expressed but positive responses were also received from the Chinese side. During her six-day visit, Yellen engaged in in-depth discussions on issues such as overcapacity, enhancing the competitiveness of U.S. companies and protecting American workers. She accurately conveyed the concerns of the Biden administration and directly received Chinese feedback.

Notably, on April 5, during a speech at the Baiyun International Convention Center in Guangzhou to the American business community, Yellen emphasized that “a full economic separation is neither practical nor desirable; we reject the idea that we should decouple our economy from China.”

On April 8 in the afternoon, Yellen reiterated at a news conference in Beijing that the U.S. is not pursuing decoupling. The economic connections between the U.S. and China are closely knit, and decoupling could lead to disastrous outcomes. Both sides agreed to continue communicating on issues such as balanced growth of the U.S. and Chinese economies, financial stability, sustainable finance and anti-money laundering cooperation under the U.S.-China Economic and Financial Working Group. The Chinese side provided a full response to the issue of production overcapacity. 

Major highlights of visit 

First is the timely implementation of the outcomes of the leaders’ conversations. The exchanges and guidance of the heads of state have become an important driving force in the development of China-U.S. relations. Thus, swiftly implementing the outcomes of the conversations between the two countries’ leaders has become a key link in promoting pragmatic progress.

On the evening of April 2, after a phone conversation between U.S. President Joe Biden and Chinese President Xi Jinping, Yellen quickly set off to visit China as a representative of the U.S., demonstrating her country’s execution ability and commitment to the stable development of relations.

Second, bilateral interactions were noteworthy. Coinciding with Yellen’s visit, China sent delegations to the U.S. This type of bilateral interaction demonstrates both sides’ joint efforts toward stability, with two parallel lines unfolding simultaneously. From April 2 to 5, Wang Shouwen, vice minister of commerce and China’s representative in international trade negotiations, visited the U.S. He co-chaired the first vice-ministerial meeting of the China-U.S. trade working group with U.S. Deputy Secretary of Commerce Marisa Lago.

China expressed its concerns about the U.S. imposing additional tariffs under World Trade Organization rules — specifically Section 301 — and the possibility of initiating new Section 301 investigations. It also raised questions about the overgeneralization of national security, sanctions against Chinese companies, revising trade remedy investigation rules, implementing bilateral investment restrictions and the unfair treatment of Chinese companies.

Concurrently, on April 3 and 4, the Chinese and U.S. militaries held the 2024 Military Maritime Consultative Agreement Working Group meeting in Hawaii. This was the mechanism’s first meeting after a two-year hiatus. The two sides discussed how their militaries should respond in the event of encounters or collisions at sea.

The simultaneous advancement of these two parallel lines demonstrates that the administrative teams of both governments are working hard to stabilize China-U.S. relations.

Third is synchronized tracking reports. A new feature of Treasury Secretary Yellen’s visit to China was the real-time tracking of her on both sides, revealing many details of the visit. This open exchange of information reflects the importance that China and the U.S., as the two largest economies in the world, place on the transparency of bilateral relations, and their intention to strengthen cooperation and clarify positions through public communication.

In summary, Yellen’s working visit to China not only deepened mutual understanding and trust between the two sides but also injected a stabilizing force into the relationship. 


First, Yellen demonstrated exceptional public diplomacy skills. The scene of her getting off the airplane was particularly noteworthy: She was all smiles, warmly shaking hands with the welcoming Chinese officials. A small bag was slung over her shoulder reminiscent of the type Chinese seniors might use for grocery shopping. Her other hand carried her workbag. Her silver hair and friendly countenance, combined with the seemingly modest bags for someone of her stature, instantly won over a large number of Chinese netizens, showcasing the U.S. side's pragmatic work style.

Second, the high-level reception and metaphors from the Chinese side signaled sincerity. On April 5, Chinese Vice Premier He Lifeng recounted to Yellen his experience of flying to Guangzhou through a thunderstorm. The plane circled for two hours before landing safely — a metaphor for China-U.S. relations, especially economic and trade relations, which have been likened to a rainbow after a storm.

Coincidently, on the first day of Yellen’s visit to China last year, a beautiful rainbow appeared in the sky. Vice Premier He’s flight experience, along with the memory of the rainbow, conveyed rich connotations, on one hand symbolizing China’s confidence that relations can withstand challenges and difficulties and on the other hand communicating optimistic expectations and hinting that with some effort China-U.S. relations can look forward to a more harmonious and stable future. At the same time, these experiences showcased China’s desire to strengthen bilateral understanding and cooperation through in-depth exchanges and visits.

Third, the Yellen visit is expected to inject positive energy into China-U.S. relations to overcome disturbances. She came without delay after the call from the leaders of the two countries, and before the summit of the leaders of the U.S., Japan and the Philippines in Washington and the inauguration of Taiwan island’s new leader, Lai Ching-te.

This timing is both sensitive and crucial because even though positive signs are emerging in bilateral interactions, negative factors affecting the relationship are also increasing. America’s economic, trade and technological pressure on China is escalating, with a continuously extended sanctions list. At the end of February, the U.S. Department of Commerce initiated an investigation into the national security threats posed by Chinese automotive data and by the end of March revised export control rules in the semiconductor field, creating more barriers and compliance burdens for normal economic and trade cooperation between the two countries.

Further, the U.S. has intensified pressure on China over the so-called overcapacity issue in the fields of solar panels, electric vehicles and mature processing chips. During the April 2 call, President Xi told Biden that America’s actions were not “de-risking” but rather creating risks. He clearly stated that if the U.S. is willing to engage in mutually beneficial cooperation and share in the dividends of China’s development, China will always be welcoming. However, if the U.S. insists on suppressing China’s high-tech development and depriving the nation of its legitimate right to develop, China will not sit idly by.

Beyond the realms of economy and technology, the U.S. has shown a negative posture in geopolitical terms. The U.S. Navy and the Indo-Pacific Command have attempted to involve the Taiwan local authorities in the so-called Joint Island Defense Concept plan, aiming to strengthen the military containment of China along the so-called first island chain. A spokesperson for the Ministry of Foreign Affairs of the People’s Republic of China emphasized that China firmly opposes U.S.-Taiwan military collusion and urges the U.S. to recognize the high sensitivity and potential severe harm associated with the Taiwan issue and truly honor its commitments.

President Xi stressed in the leaders’ call that the Taiwan issue is the first insurmountable red line in China-U.S. relations. China will not sit back as separatists seeking Taiwan independence receive the indulgence and support of external entities.

In the South China Sea, the escalation of tensions is also related to U.S. activities. The Philippines, despite China’s firm opposition, recently sent supply ships and Coast Guard vessels illegally into the waters near Ren’ai Reef in the Nansha Islands, attempting to deliver building materials for the repair and reinforcement of a military ship deliberately beached there.

At the end of March, U.S. Defense Secretary Lloyd Austin spoke with his Philippine counterpart, stating that “the United States supports the Philippines in defending its sovereign rights and jurisdiction” and reiterating that the U.S.-Philippines Mutual Defense Treaty applies to the South China Sea.

Additionally, the spillover effects of domestic political competition within the United States on China-U.S. relations cannot be ignored, especially in an American election year. Some American politicians use the “China issue” to demonstrate strength and seek political gains. In the face of these trends, it is necessary to appropriately respond to the negative posture of the U.S. in handling China-U.S. relations.

Fourth, Yellen’s accusations about Chinese overcapacity are entirely baseless. The U.S. has consistently been the largest exporter of agricultural products globally. Since 2008, the proportion of U.S. agriculture and food production sold abroad has remained relatively stable at about 20 percent. In 2023, the total value of U.S. agricultural exports was approximately $178.7 billion, with exports to China reaching $33.7 billion. This means that exports to China alone accounted for about 18.8 percent of the total value of U.S. agricultural exports.

Shouldn’t we also discuss the issue of overcapacity in the U.S.? And what of Germany, which produced 4.1 million cars in 2023, with 3.1 million being exported abroad — does this represent overcapacity as well?

Despite the Biden administration’s claims that it is not restricting China’s development, the “new three” sectors— new-energy vehicles, lithium batteries, solar cells —are among the fastest-growing areas of China’s exports in recent years. Using overcapacity as a pretext to suppress its production is effectively suppressing China’s development.

Fifth, how can a healthy economic relationship be established? Yellen emphasized several times before and during her visit to China the importance of establishing a healthy, mutually beneficial economic relationship. But how should a healthy economic relationship be defined? And how can it be achieved? A healthy economic relationship should be win-win, not just serving the interests of one side. Discrepancies should be resolved through communication and consultation, and leave it to business and the market to resolve independently, rather than through direct government intervention.

At the beginning of Joe Biden’s term, the U.S. administration aimed to distinguish itself from its predecessor’s high tariff policies and recognized that Donald Trump’s trade policies had violated U.S. international commitments within the WTO. Despite making statements on trade and globalization, the Biden administration has, in practice, continued the policies of the Trump era, rather than returning to those of the Obama era, and thus has increasingly moved away from neoliberalism and toward protectionism.

The latest evidence of this shift came in October 2023 when the Office of the United States Trade Representative withdrew a digital trade proposal during WTO negotiations. This proposal had called for WTO e-commerce rules to allow free cross-border data flows and to prohibit requirements for data localization and source code inspections by member countries. Many multinational companies had been eager to see these proposals realized.

What’s more, viewing free trade as harmful to the U.S. is entirely misleading. If the U.S. continues to walk down the path of protectionism, it will lose the benefits that free trade brings to American companies and workers and will never be able to establish healthy economic relationships with other countries. Establishing healthy economic relationships requires strengthening dialogue in a mutually respectful manner, managing differences cautiously, promoting cooperation in a spirit of mutual benefit and strengthening international coordination with a responsible attitude.

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