U.S.'s Urgent Time

Yellen's Trip: Washington needs China's cooperation to solve its headaches at home.

Yellen’s trip eyes on ‘further stabilizing’ China-US ties

By Yang Sheng and Zhang Weilan (Amended)

US Secretary of the Treasury Janet Yellen, a US senior official who is believed to be pragmatic and less hawkish toward China than many of her peers, has arrived Guangzhou, capital of South China's Guangdong Province, and kicked off her 6-day visit to China from Thursday to Tuesday (April 4-9), with Chinese experts saying on Friday that Yellen is trying to seek helps from China to solve US economic challenges, and they said US officials need to adjust its arrogant attitude and speak nicely when asking helps.

He Lifeng, a member of the Political Bureau of the Central Committee of the Communist Party of China and Vice Premier of the State Council, has met with US Treasury Secretary Janet Yellen in Guangzhou. The two sides discussed in-depth key issues related to the global, economic and financial fields of China and the US.

He said the main task for this meeting is to implement the important consensus reached by the two heads of state in their meetings and telephone dialogue, and seek to provide appropriate responses to key concerns in China-US economic relations, state broadcaster CCTV reported on Friday.

"I opened meetings with Vice Premier He Lifeng for frank and substantive conversations on our bilateral economic relationship. It is crucial that the two largest economies in the world seek progress on global challenges and closely communicate on areas of concern," Yellen said in a post on social media platform X on Friday afternoon.

On Friday, Yellen also had round-table discussions with economic experts and business leaders from the US and some other countries from Europe and Japan to discuss the economic situation of Chinese market, as well as opportunities and challenges linked to the Chinese economy. Yellen also attended an event with leading representatives of the American business community in China, hosted by AmCham China, and delivered remarks on the bilateral economic relationship. 

According to her released schedule in coming days, which expected to include meetings with Chinese Premier Li Qiang and senior Chinese officials who in charge different economic and financial sectors of China, analysts said Yellen's trip eyes on further stabilizing the China-US relations as US President Joe Biden doesn't want a fragile and uncertain bilateral ties with China, and Washington needs China's cooperation to solve its headaches at home: a national debt problem and save US backward production capacity by adding pressure to China's development in new energy technologies with the pretext of "overcapacity."  

In the phone call between the presidents of the two countries on Tuesday evening, Biden is probably asking for China to permit Yellen's visit, as we can see Yellen kicks off her visit very soon after the phone call, which means that the US has prepared for the visit for a long time, and they are just waiting for China's green light, Jin said. 

"According to this, we can have a conclusion that the US is asking for something urgent. Washington's national debt problem could be the top of the agenda. Yellen might ask help from China in the field of monetary policy," Jin noted.

The Congressional Budget Office warned in its latest projections that US federal government debt is on a path from 97 percent of GDP last year to 116 percent by 2034, which is higher even than in World War II. The actual outlook is likely worse, Bloomberg reported on April 2.

The CNBC reported on March 1 that the debt load of the US is growing at a quicker clip in recent months, increasing about $1 trillion nearly every 100 days.

Li Yong, a senior research fellow at the China Association of International Trade, told the Global Times on Friday that in this visit, the Biden administration is seeking the further stabilization of China-US relations in the presidential election year. "The two sides are expected to discuss about coordination on macroeconomic policy and trade, and this is not only important to China and the US, but also significant to the world." 

But as a US official with pragmatic and relatively friendly image to China, Yellen this time presented her tough stance in some areas. According to the website of US Department of Treasury, "During her engagements in China, Secretary Yellen will advocate for American workers and businesses to ensure they are treated fairly, including by pressing Chinese counterparts on unfair trade practices and underscoring the global economic consequences of Chinese industrial overcapacity."

Chinese government subsidies and other policy support have encouraged solar panel and EV makers in China to invest in factories, building far more production capacity than the domestic market can absorb.

While that has driven down prices for consumers, Western governments fear that that capacity will flood their markets with low-priced exports, threatening American and European jobs.

Washington will not allow "a glut of Chinese production to wipe out American manufacturers of green technology," Yellen has warned ahead of a trip to China, the Financial Times reported on Thursday.

Li said the US should take the issue about "overcapacity" more objectively, because China's productive capacity is determined by the global demand and the efficiency and market size of China.

Lü Xiang, a research fellow on US studies at the Chinese Academy of Social Sciences, told the Global Times that Yellen's expression is a bad signal for China-US trade ties, as this is implying that when the US development in areas like new energy and electric vehicle (EV) is facing backward or even failure, Washington is trying to contain China's productive capacity to protect its backward capacity.

"This is very disappointing, as this is indecent for a US Secretary of Treasury to blame and contain China's development in advanced areas to protect US' backward productive capacity," Lü noted. 

At present, China's EV export and photovoltaic industry have unshakable status in the world market, the US' measure to contain China in these fields will receive no outcomes, Lü said. "Chinese economic and financial officials can give Yellen a good lecture about how to mobilize resources in the market and whole society to develop a new industry. The EV industry is an example of the success of China's market economy."

Chinese analysts said that Yellen and the Biden administration should understand that, if they are coming to China to ask for help and cooperation, they need to adjust their arrogant attitude and speak nicely, and don't ask for unfair competition to confront and contain China, who will never submit to pressure based on hegemonic logic.

---