The United States will not compromise on national security interests and human rights in its pursuit of a “healthy” economic relationship with communist China, Treasury Secretary Janet Yellen said on Thursday.
Her remarks came ahead of a planned meeting between President Joe Biden and Chinese Communist Party (CCP) leader Xi Jinping at the Asia-Pacific Economic Cooperation forum in San Francisco later this month.
In her address to the Asia Society in Washington on Nov. 2, Ms. Yellen said the United States has no intention of decoupling from China but rather adopts a “serious and clear-eyed” approach that centers on three main goals.
Ms. Yellen said the first goal includes securing U.S. national security interests and advancing human rights. She made it clear that Washington will not compromise on these two areas.
“When we take national security actions using economic tools, we do so in narrowly targeted ways, such as with President Biden’s executive order on outbound investments, aimed at accomplishing our national security goals, not choking off growth in China,” she said.
The second objective is to maintain a “healthy economic relationship” with China that is mutually beneficial, according to Ms. Yellen.
“This means responding appropriately to China’s unfair economic practices, such as nonmarket policies that disadvantage American firms and workers, the barriers it imposes to market access, and its use of economic power to coerce vulnerable trading partners,” she said.
On the third objective, Ms. Yellen said the United States is working to collaborate with China on current global challenges, including climate change and debt distress in low-income countries.
However, these objectives can only be attained through “deep and durable communication” between the two sides. Ms. Yellen said that such communication is essential “to prevent misunderstanding and clarify our areas of agreement and disagreement.”
Ties between China and the United States, the world’s largest economies, have reached historic lows due to disputes over Taiwan, the South China Sea, trade, security, technology, and other issues.
The Biden administration has sought high-level engagements with the CCP to stabilize tensions. Top U.S. officials—including Ms. Yellen, Secretary of State Antony Blinken, and Commerce Secretary Gina Raimondo—have previously visited China for talks with their counterparts.
Why US Won’t Decouple From China
Ms. Yellen said that a full separation of the U.S. and Chinese economies is “simply not practical,” considering the extent of economic linkages within the Indo-Pacific region and the complexity of global supply chains.“A full separation of our economies, or an approach in which countries, including those in the Indo-Pacific, are forced to take sides, would have significant negative global repercussions.
“We have no interest in such a divided world and its disastrous effects,” she said.
Ms. Yellen said that Washington would instead pursue “de-risking and diversifying” its economic ties with Beijing by investing at home and strengthening linkages with allies and partners around the world.
“We see economic engagement with the Indo-Pacific as crucial to bolstering our supply chain security,” she said, adding that the United States seeks to boost economic ties with India, Vietnam, and other Indo-Pacific countries.
According to Ms. Yellen, trade between the United States and the Indo-Pacific region has “steadily increased” over the past decade, reaching $2.28 trillion in 2022. The United States exported about $770 billion worth of goods and services to the region last year.
“We are trading in substantial and rising amounts with the Indo-Pacific, so these shifts do not mean less trade, just a different pattern of flows of goods and services.
“We’re generating diverse and secure supply chains, protecting our national security and advancing our values while growing economies across the Indo-Pacific,” she added.
