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Yellen Rejects Economic Decoupling From China

In a visit to Beijing on Friday, US Treasury Secretary Janet Yellen emphasized the importance of a stable and constructive relationship between the United States and China. She stated that the US is not seeking to “decouple” its economy from China, as such a move would destabilize the global market.

Yellen’s four-day trip to China aims to develop a strong and cooperative relationship between the two economic giants. She explained that “healthy” competition between the nations is beneficial for both parties.

The Treasury Secretary’s visit follows that of US Secretary of State Antony Blinken, who traveled to Beijing last month as part of Washington’s efforts to ease tensions between the two countries.

Yellen expressed concerns about Beijing’s announcement that special licenses would be required to export gallium and germanium, essential metals used in computer chip production, starting next month. She highlighted the need for resilient and diversified supply chains in light of these export controls.

China’s Finance Ministry responded with a statement expressing hope that the US would take concrete actions to create a favorable environment for bilateral economic and trade ties. The statement emphasized that a trade war or economic decoupling would benefit neither nation.

The US and China have been engaged in a dispute over semiconductors and advanced technologies for several months. Last year, the Biden administration implemented measures to strengthen US tech capabilities and limit China’s access to advanced technology, including export control rules restricting certain semiconductor chips.

Yellen clarified that actions taken to protect national security are narrowly targeted and discussed these measures with the Chinese government during her visit.

While Beijing has responded with limited actions thus far, they retaliated in May by banning memory chips produced by Micron, the largest US chip manufacturer, citing security concerns.

The ongoing trade tensions between the US and China continue to shape their economic relationship. Yellen’s visit and discussions aim to find common ground and foster a more cooperative approach.

Check out other articles in our Geopolitical section.


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