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Yellen calls for “constructive and fair“ US economic ties with China

2023-04-20T09:13:02Z

U.S. Treasury Secretary Janet Yellen speaks during a news conference at the Treasury Department in Washington, U.S., April 11, 2023. REUTERS/Elizabeth Frantz/File Photo

The U.S. seeks “constructive and fair” economic ties with China, but will protect its national security interests and push back against China’s actions to dominate foreign competitors, Treasury Secretary Janet Yellen will say in a speech on Thursday.

In excerpts released by Treasury, Yellen laid out the Biden administration’s principal objectives for the economic relationship between the world’s two largest economies amid ongoing tensions that have thwarted high-level meetings.

Yellen, who has said she still hopes to visit Beijing to meet with her new economic counterparts, said the United States remained the world’s largest and most dynamic economy, leading in areas ranging from wealth to technological innovation.

“More than resources or geography, our country’s success can be attributed to our people, values and institutions. American democracy, while not perfect, protects the free exchange of ideas and rule of law that is at the bedrock of sustainable growth,” she said in the remarks prepared for delivery at Johns Hopkins University’s School of Advanced International Studies.

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 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 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,” she 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.”