Secretary Yellen’s Visit Unlikely to Repair Relations

Secretary Yellen’s Visit Unlikely to Repair Relations
Chinese Premier Li Qiang (right) speaks with U.S. Treasury Secretary Janet Yellen during a meeting in Beijing on July 7, 2023. (Mark Schiefelbein/Pool/AFP via Getty Images)
Antonio Graceffo

U.S. Treasury Secretary Yellen’s goal in Beijing is to explain President Joe Biden’s China policy, which has shifted a great deal.

Prior to the beginning of the administration, it was widely believed that Mr. Biden would repeal the Trump-era tariffs and take a softer stance on China. In reality, he appointed a number of people who are no friends of China’s ruling Chinese Communist Party (CCP), such as United States Trade Representative (USTR) Katherine Tai who is of Taiwanese descent.

During the first year of the administration, Mr. Biden kept in place most of former President Donald Trump’s China tariffs, which many attributed to the fact that the Biden White House had not yet issued a solid China policy.

However, rolling into 2022 and 2023, it became clear that the White House was keeping the tariffs in place and that the CCP would not get a free pass from the new administration. Robert Lighthizer, the Trump-era USTR from 2017 to 2021, told NPR, “They have literally done nothing but follow our policy.”
In addition to keeping most of the tariffs, the Biden administration has continually added China-based or -linked companies to the Department of Commerce’s Entities List, restricting U.S. companies from doing business with them.
The United States has also banned the export of certain types of computer chips to Chinese entities, a move which is having an adverse impact on the CCP’s ability to develop new technology. Not only the United States, but also its allies, including Europe and Japan, have agreed to observe the chip ban. Furthermore, the Biden administration has brought sanctions against the CCP for the regime’s human rights abuses.

Secretary Yellen’s visit to Beijing, from July 6 to 9, is meant to deescalate worsening relations between the two nations. Explaining the reasons for her trip, Ms. Yellen echoed the words of U.S. Secretary of State Antony Blinken, who recently returned from Beijing, saying that she hoped to, “responsibly manage our relationship, communicate directly about areas of concern, and work together to address global challenges.”

Ms. Yellen’s meetings in Beijing will be a continuation of discussions that took place between Mr. Biden and Chinese leader Xi Jinping during the G20 Summit in November. Both Mr. Biden and Mr. Xi stressed the importance of avoiding a conflict.

U.S. President Joe Biden (right) and Chinese leader Xi Jinping (left) shake hands as they meet on the sidelines of the G20 Summit in Nusa Dua on the Indonesian resort island of Bali on Nov. 14, 2022. (Saul Loeb/AFP via Getty Images)
U.S. President Joe Biden (right) and Chinese leader Xi Jinping (left) shake hands as they meet on the sidelines of the G20 Summit in Nusa Dua on the Indonesian resort island of Bali on Nov. 14, 2022. (Saul Loeb/AFP via Getty Images)

Shortly before she left for Beijing, Ms. Yellen met with Chinese Ambassador to the United States, Xie Feng. The meeting was seen as a good sign that both sides were committed to improving relations. Ms. Yellen also said that she would like to reopen economic talks with her Chinese counterpart.

Mr. Biden has expressed that he wants to see relations with China improve. From the CCP’s point of view, tensions can only be diminished if the United States removes tariffs, restrictions, and sanctions.

On the other hand, Beijing has done nothing to remedy the issues at the root of U.S. concern. Human rights abuses in Xinjiang continue. Beijing has repeatedly committed fishing violations and encroached on the sea space of U.S. allies in the South China Sea. Mr. Xi is threatening to take Taiwan.

The recent spy balloon incident was also not a one-off. Meanwhile, China is responsible for exporting precursor chemicals to Mexican drug cartels for the production of the fentanyl that killed nearly 100,000 Americans last year.

The Russian war in Ukraine is another point of contention between China and the U.S.-led liberal democratic world. It is becoming increasingly likely that Beijing is secretly supporting the Russian war in Ukraine.

In February, it was determined that the CCP had sent thousands of shipments of goods, including parts for fighter jets, as well as other military technology to Russia. In spite of Mr. Xi’s assurances that China does not want to see the war escalate, Russia has asked for weapons and it remains unclear if Beijing will oblige.

Back in April, Ms. Yellen announced that the Biden administration would prioritize national security over the economy in its relationship with communist China. At the G7 meeting, the world’s leading economies agreed that they wanted to “de-risk” by redirecting new investment to other countries, rather than expanding China-based operations.

Although none of the world leaders used the term “decoupling,” the Biden administration has encouraged shifting manufacturing and supply chains from China to U.S. allies. Additionally, following the United States’s example, Australia, Japan, and the United Kingdom have all made significant increases to their defense spending.

At the same time that the U.S.-led West appears to be leaning away from China, the CCP is closing China off from the world. Under Mr. Xi, China has been moving further away from market reforms, as the central government’s control of the economy increases. China’s flagging economy, plus the passage of the CCP’s new “counter-espionage” law, is scaring off foreign investment and driving foreign companies to relocate in increasing numbers.

The problems between the United States and China are many and complex. And while Ms. Yellen is a very capable public official, it seems unlikely that her visit will cause the CCP to change track, abide by the global rules-based order, and de-escalate tensions.

Of course, the United States could instantly make the CCP happy by forgetting all of the CCP’s wrongdoing and removing tariffs and sanctions. But it seems unlikely that this will happen.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Antonio Graceffo, PhD, is a China economic analyst who has spent more than 20 years in Asia. Mr. Graceffo is a graduate of the Shanghai University of Sport, holds a China-MBA from Shanghai Jiaotong University, and currently studies national defense at American Military University. He is the author of “Beyond the Belt and Road: China’s Global Economic Expansion” (2019).
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