Treasury Secretary Janet L. Yellen came to China amid hopes that the United States could restart a relationship that has soured for years and recently unraveled amid significant tensions — including the war in Ukraine, a Chinese spy balloon that took flight. over American territory and was shot by the American army, and the two countries increasing exchange of restrictions on trade.
After 10 hours of meetings over two days in Beijing, Ms. Yellen told a news conference on Sunday that she believed the United States and China were more stable despite their “significant differences.”
“We believe the world is big enough for both of our countries to prosper,” Ms. Yellen said.
Ms. Yellen announced that the two sides would pursue more frequent communication at the highest levels, describing improved dialogue as a way to prevent mistrust from building and tearing apart a relationship she called “one of the most consequential of our time.” Her trip followed one a few weeks by Secretary of State Antony J. Blinken. And later this month, John Kerry, the president’s special envoy for climate change, will visit China to resume talks on global warming.
However, a significant easing of the economic tension may not be likely. Ms. Yellen returned to Washington on Sunday with no announcements of breakthroughs or agreements to mend the persistent rifts between the two nations. And Ms. Yellen made it clear that the Biden administration has serious concerns about many of China’s trade practices, including its treatment of foreign companies, and policies that the United States views as efforts at economic coercion.
During her trip, the first by a US Treasury secretary in four years, Ms. Yellen met with four of the most powerful Chinese leaders involved in economic policymaking under President Xi Jinping, who is at the start of his third term: Premier Li. Qiang, the 2nd official of China; Ms. Yellen’s counterpart, Deputy Prime Minister He Lifeng; the finance minister, Liu Kun; and the newly installed party chief of the People’s Bank of China, Pan Gongsheng.
Hours before Ms. Yellen’s press conference, China’s official news agency, Xinhua, published a report on her visit that described the talks as constructive but also reiterated what China views as key points of contention. The report expressed China’s continuing objections to the Biden administration’s emphasis on maintaining US national security through trade restrictions.
“China believes that generalization of national security is not conducive to normal economic and trade exchanges,” Xinhua said. “The Chinese side has expressed concern about US sanctions and restrictive measures against China.”
The US-China relationship is extremely consequential. Their economies, the two largest in the world, together represent 40 percent of global production and remain integral partners in many ways. They sell and buy critical products from each other, finance each other’s businesses, and create programs and films for audiences in both countries.
Chinese officials have expressed their own concerns with Ms. Yellen. The Treasury secretary said they discussed the tariffs the Trump administration imposed on Chinese imports that were left in place. While Ms Yellen criticized tariffs as ineffective, she suggested the administration would not make any decision on the tariffs until an ongoing internal review of them was completed, reiterating the administration’s position since President Biden took office.
She also acknowledged Chinese concerns about looming US restrictions on investment in China and said she tried to make clear that such measures would be narrowly targeted at certain sectors and not intended to have broad effects on China’s economy. Chinese officials and experts also worry that the administration’s efforts to limit China’s access to certain technology could hinder their development of high-powered industries such as artificial intelligence and quantum computing.
China has had its own broader restrictions on outflow investment since 2016, as it encouraged Chinese companies and households to shun overseas real estate speculation and pushed them instead to invest abroad in sectors of strategic value such as aircraft production, heavy manufacturing and cyber security. .
Wu Xinbo, the dean of international studies at Fudan University in Shanghai, warned that Ms. Yellen’s trip will not result in a substantial improvement in relations unless it is accompanied by changes in the Biden administration’s policies toward China.
“So far, we have seen no sign that Biden will rethink his economic policy toward China,” he said.
The desire for more dialogue struck some analysts as a significant development, with both countries at least talking about their disagreements after months of silence.
He Weiwen, a former official at China’s Ministry of Commerce who is now a senior fellow at the Center for China and Globalization in Beijing, welcomed Ms Yellen’s comment that both China and the US could prosper. “China and the United States have deep differences, so constant, direct exchanges are not only constructive but very important,” he said.
Chinese economic policymakers have a long history of working more closely with the Treasury Department, which has historically valued China as a sizable investor in U.S. bonds and as a potential market for U.S. financial services. The Commerce Department and the Office of the US Trade Representative, with their greater emphasis on boosting employment and industrial self-reliance, have tended to have more uneasy relations with their Chinese counterparts.
This has been especially true during the Trump administration. Liu He, who was the vice premier overseeing international economic policy until He Lifeng succeeded him four months ago, has tried repeatedly to reach compromises on trade and economic issues with Steven Mnuchin, who served as Treasury Secretary under former President Donald J. Trump. But Mr. Mnuchin was unable to persuade Mr. Trump, who ended up imposing tariffs on a wide range of Chinese exports in retaliation for what he said were unfair trade practices.
Many American businesses with ties to China, along with Chinese officials, had hoped for friendlier relations under Mr. Biden. Instead, tensions between the United States and China have deepened over the past two years and became completely frozen after the spy balloon episode in February.
While Ms. Yellen’s visit was seen as a positive step, many experts in China and the United States cautioned against expecting much to change.
“Yellen’s trip is likely to lower the temperature of the economic relationship a bit and remind the US and China that they share some trade interests, even if declining, and they need to talk thinly — maybe trade conditions will improve at the margins,” said Mark Sobel. , former longtime Treasury Secretary.
But given the national security concerns in both countries, the perception in China that the United States is seeking to restrain its economic progress and hawkish political language on both sides, he said, “Yellen’s trip will hardly change the underlying dynamics and trajectory of the economic relationship.”
Despite the disagreements between the United States and China, Mrs. Yellen was warmly greeted during her first visit to Beijing as Treasury Secretary.
In a meeting with Premier Li Qiang, China’s second-highest official, he mentioned that a rainbow had appeared overhead after her arrival and suggested it was a symbol of hope that ties between the two countries could be repaired.
After Ms. Yellen was seen dining Thursday night at a restaurant that serves cuisine from Yunnan province, Chinese state media wrote about her impressive use of chopsticks and reported that reservations at the restaurant were increased after she was seen eating mushroom dishes on social media.
Ms. Yellen also met with Chinese climate finance experts and had lunch with a group of Chinese women who are economists and entrepreneurs. She suggested that there are many areas where the US and China can find agreement.
“Our people share many things in common – far more than our differences,” Ms. Yellen said at the luncheon.
Ana Swanson contributed reporting.