Janet Yellen defends US companies against Chinese pressure on the Beijing trip

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Janet Yellen has told US business executives that she will raise her concerns to Chinese officials about punitive measures taken against US companies as she embarks on a mission to stabilize 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 raised concern among US companies, including increased pressure on companies and possible Chinese restrictions on exports of critical minerals.

“I report the concerns I’ve heard from the American business community, including China’s use of non-market tools such as expanded subsidies for state-owned enterprises and domestic businesses, as well as barriers to market access for foreign companies,” she said.

Yellen is scheduled to meet Chinese Premier Li Qiang on Friday as part of her four-day visit to the country.

Yellen arrived in Beijing several weeks after Anthony Blinken became the first cabinet secretary to visit China during Joe Biden’s presidency. And the two sides are seeking to stabilize relations after Biden and Chinese President Xi Jinping agreed in November to lay a “ground floor” within the framework of the relationship and ensure that competition does not turn into conflict.

That momentum 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 crackdowns on US due diligence and advisory firms, an apparent attempt to make it more difficult for foreign firms 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 seen by Washington as retaliation for US export controls aimed at thwarting Chinese efforts to acquire and develop advanced chips.

Before Yellen left the United States this week, Beijing said Chinese groups would have to apply for licenses to export gallium and germanium, two key components in chipmaking. She said the US was “still assessing” the move, adding that it highlighted the need for “flexible and diversified supply chains”.

“I am also concerned about new export controls China recently announced on two critical metals used in technologies such as semiconductors,” Yellen told the executives.

It also said Washington’s approach was aimed at diversification and “not decoupling” from China and that national security measures, such as export controls, were narrowly targeted. US officials have expressed concerns about the use of US technology with dual commercial and military purposes to aid the People’s Liberation Army.

Scott Kennedy, a China expert at the Center for Strategic and International Studies CSIS, said one of Yellen’s goals is to meet the Chinese officials who have held top economic posts this year, including her chief counterpart, Vice Premier He Lifeng who succeeded Liu He as China’s economic czar. .

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Yellen’s team has not confirmed whether she will meet Liu Kun, the new finance minister, or Pan Gongsheng, the incoming head of China’s central bank. Earlier on Friday, she met Liu Wei Gang, the outgoing governor of the People’s Bank of China.

“Yelen doesn’t know her peers who oversee Chinese economic policy,” Kennedy said. “Although all the big decisions flow through Xi Jinping, these individuals and their bureaucracies remain important… The world will watch carefully for any signs of progress or continued stalemate.”

Chu Feng, a foreign policy expert at Nanjing University, said the visit was not expected to result in any breakthroughs or “change the structure of bilateral relations” but could help “soothe some misunderstandings.”

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