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Janet Yellen has told American business executives that she will voice concerns to Chinese officials about punitive actions taken against US companies as she embarks on a mission to stabilise fraught relations between the powers.
Yellen said at the American Chamber of Commerce in Beijing on Friday that she wanted to “deepen” communication with China.
But Yellen, who is the first US Treasury secretary to visit China in four years, added that she would raise issues that have triggered alarm among American businesses, including the escalating pressure on companies and possible Chinese export controls on critical minerals.
“I am communicating the concerns that I’ve heard from the US business community, including China’s use of non-market tools like expanded subsidies for its state-owned enterprises and domestic firms, as well as barriers to market access for foreign firms,” she said.
Yellen is set to meet China’s premier Li Qiang on Friday as part of her four-day visit to the country.
Yellen arrived in Beijing several weeks after Antony Blinken became the first cabinet secretary to visit China during Joe Biden’s presidency. Both sides are seeking to steady ties after Biden and Chinese president Xi Jinping agreed in November to set a “floor” under the relationship and ensure that competition did not veer into conflict.
That impetus was derailed when a suspected Chinese spy balloon crossed North America before being shot down in February.
Yellen said she was “particularly troubled” by Beijing’s recent punitive measures, including a crackdown on US due diligence and consulting firms, an apparent effort to make it harder for foreign companies to obtain sensitive data on certain industries.
Beijing also banned Chinese entities involved in critical infrastructure from buying semiconductors from Micron, the Idaho-based memory-chip maker, a move Washington saw as retaliation for US export controls meant to frustrate Chinese efforts to obtain and develop advanced chips.
Before Yellen departed the US this week, Beijing said Chinese groups would have to apply for licences to export gallium and germanium, which are critical for making chips. She said the US was “still evaluating” the move, adding it had highlighted the need for “resilient and diversified supply chains”.
“I am also concerned about new export controls recently announced by China on two critical minerals used in technologies like semiconductors,” Yellen told the executives.
She also said Washington’s approach was designed to diversify and “not to decouple” from China and that national security measures, such as export controls, were narrowly targeted. US officials have expressed concerns about American technology with dual commercial and military purposes being used to help the People’s Liberation Army.
Scott Kennedy, a China expert at the CSIS think-tank, said one goal for Yellen was to meet Chinese officials who took over top economic portfolios this year, including her main counterpart, vice-premier He Lifeng who succeeded Liu He as China’s economic tsar.
Yellen’s team has not confirmed whether she will see Liu Kun, the new finance minister, or Pan Gongsheng, the incoming head of China’s central bank. Earlier on Friday, she met Liu and Yi Gang, the outgoing governor of the People’s Bank of China.
“Yellen does not know her counterparts who oversee Chinese economic policy,” said Kennedy. “Although all big decisions flow through Xi Jinping, these individuals and their bureaucracies still matter . . . The world will be watching carefully for any signs of progress or continued deadlock.”
Zhu Feng, a foreign policy expert at Nanjing University, said the visit was not expected to produce any breakthroughs or “change the structure of bilateral relations” but could help “de-escalate some misunderstandings”.
