Treasury Secretary Janet L. Yellen on Friday criticized the Chinese government’s tough treatment of companies with foreign ties and its recent decision to impose export controls on certain critical minerals, suggesting that such actions vindicate the Biden administration’s efforts to make American manufacturers less dependent on China.
Ms. Yellen made a strong defense of American industry on her first day of meetings in Beijing during a high-stakes trip to ease tensions between the United States and China. Her comments, to a group of executives from American companies operating in China, underscored challenges the world’s two largest economies face as they seek to overcome their deep differences.
“During meetings with my counterparts, I communicate the concerns I have heard from the American business community — including China’s use of non-market tools such as increased subsidies for its state-owned enterprises and domestic firms, as well as barriers to market access for foreign firms,” Ms. Yellen told members of the American Chamber of Commerce in China at a roundtable event. “I have been particularly disturbed by punitive actions that have been taken against American companies in recent months.” Representatives from Boeing, Bank of America and the agricultural giant Cargill was among those present.
In March, the Chinese authorities arrested five Chinese nationals working in Beijing for the Mintz Group, an American consulting company with 18 offices around the world, and closed the branch. The next month, the authorities questioned employees in the Shanghai office of Bain & Company, the American management consulting firm.
An investigation into US companies operating in China followed restrictions the Biden administration imposed on China’s access to critical semiconductors and tools.
The Biden administration is preparing further restrictions on US technology trade with China, including possible limits on advanced chips and US investment in the country. The administration is also preparing to limit Chinese companies’ access to US cloud computing services, to close a loophole in earlier restrictions on China’s access to advanced chips used for artificial intelligence.
The spat continued this week as Beijing hit back at the Biden administration’s restrictions on semiconductors, announcing it would limit the export of some critical minerals used in the production of some chips.
A Chinese finance ministry official expressed hope on Friday that the meetings with Ms Yellen would improve economic relations and suggested that the US should take steps to do so. The official added that no country benefits from “unbundling” and disrupting supply chains.
Ms. Yellen said on Friday that she was “troubled” by China’s decision to implement the export controls.
“We are still assessing the impact of these actions, but they remind us of the importance of building resilient and diversified supply chains,” Ms Yellen said. She suggested that further responses from the United States could be threatened to ensure that American businesses and workers are treated fairly.
“I will always stand up for your interests and work to make sure there is a level playing field,” Ms. Yellen added. “This includes coordinating with our allies to respond to China’s unfair economic practices.”
Businesses are also alarmed by China’s increasingly tight national security laws, which include a tough counter-espionage law that came into force on Saturday. The US State Department issued a warning this week advising Americans to reconsider traveling to China due to the possibility of wrongful arrest.
The treasury secretary planned to raise these issues during a flurry of meetings with top Chinese officials over the next two days.
In addition to the business leaders, Ms. Yellen also met on Friday with Liu He, a former vice premier of China, and Yi Gang, the outgoing governor of the People’s Bank of China. A Treasury official said Ms. Yellen discussed the outlook for the economy in an informal discussion with her former counterparts that lasted more than an hour.
Later on Friday afternoon, she will meet with Premier Li Qiang in the Great Hall of the People.
Claire Fu contributed reporting.