China and the United States seek consensus on economic issues, Yellen promised not to "alienate China"

Source: Global Times

When meeting with US Treasury Secretary Yellen at the Great Hall of the People on the afternoon of 7 July, Premier Li Qiang said that the world needs generally stable Sino-US relations, and whether China and the United States can get along correctly is related to the future and destiny of mankind. It is hoped that the US side will uphold a rational and pragmatic attitude, meet China halfway, and promote China-US relations to return to the right track at an early date. Yellen said that the United States does not seek "decoupling and breaking the chain" and is willing to strengthen communication with China to avoid misunderstanding due to differences. Bloomberg quoted a US Treasury Department official on the 7th as saying that Yellen met with China's economic policy veteran Liu He, former vice premier of the State Council and director of the Office of the Central Financial and Economic Commission, and Yi Gang, governor of the People's Bank of China, on the morning of the 7th to discuss the global economy and the respective economic prospects of the United States and China. US media reports mentioned that Yellen repeatedly mentioned "fairness" and "rules" in her speech that day, and said that she hoped for "healthy competition" with China. Some scholars believe that China is certainly happy to see fair competition, but what is fair competition is not the final say of the United States, and China and the United States should consult and recognize each other. In addition, Yellen said that China's export controls on two key metals, gallium and germanium, worried the United States, and declared that the United States and its allies would fight back against China's "unfair economic practices." Some analysts believe that the United States benefits from disguising itself as a "victim" to trick other countries into confronting China. Some foreign media said that although some politicians strongly advocated the "parting of ways" between China and the United States, the trade data reminded the reality of the two countries.

"Mutual benefit and win-win results are the essence of Sino-US economic relations"

When meeting with Yellen, Li Qiang said that President Xi Jinping and President Biden successfully met in Bali, Indonesia last year and reached a series of important consensuses, which pointed out the direction for Sino-US relations. Mutual respect, peaceful coexistence and win-win cooperation are the basic and correct ways to get along with each other. Chinese civilization has always attached great importance to peace and opposed hegemony and bullying.

Li Qiang pointed out that the economic interests of China and the United States are closely intertwined, mutual benefit and win-win results are the essence of Sino-US economic relations, and strengthening cooperation is the realistic need and correct choice of both sides. China's development is an opportunity rather than a challenge for the United States, a gain rather than a risk. Politicizing and securitizing economic cooperation is not conducive to the economic development of the two countries and even the world. The two sides should strengthen communication and seek consensus on important bilateral economic issues through frank, in-depth and pragmatic exchanges, so as to inject stability and positive energy into China-US economic relations. China and the United States should strengthen coordination and cooperation, work together to address global challenges, and promote common development.

Yellen said that the United States does not seek "decoupling and breaking the chain" and has no intention of hindering China's modernization process, and is willing to implement the consensus reached at the Bali meeting between the two heads of state with China, strengthen communication, avoid misunderstanding due to differences, strengthen cooperation in macroeconomic stability and global challenges, and seek mutual economic benefit and win-win results between the United States and China.

"Yellen promised Li Qiang that the United States does not seek to alienate China economically", according to the Wall Street Journal reported on the 7th, Yellen downplayed the actions implemented by the United States to restrict China's access to sensitive technologies, and said that the United States seeks to engage in "healthy competition" with China based on "fair rules" that benefit both countries. Reuters said Yellen also said she hoped the visit would promote the establishment of regular communication channels between China and the United States, saying both countries have a responsibility to play a leading role in addressing global challenges such as climate change. Bloomberg quoted sources on the 7th as saying that US Special Envoy for Climate John Kerry is expected to visit China in mid-July to hold talks with China on global warming.

Gao Lingyun, a researcher at the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, told the Global Times reporter on the 7th that he is happy to see that the United States does not seek to fully decouple from me, but hopes that the United States will match its words and deeds, and will not play the phrase of "de-risk" instead of "comprehensive decoupling". Of course, we are also happy to see fair competition, but what is fair competition, it is not the United States that has the final say, China and the United States should consult with each other and recognize each other, if it is limited to the definition of the United States, then it is unfair to us.

A number of foreign media noticed that when Yellen arrived in Beijing on the 6th and got off the plane, a rainbow appeared in the sky. Yang Yingming, director of the Department of International Economic Relations at China's Ministry of Finance, pointed Yellen's rainbow in the sky, and the two shook hands for nearly 20 seconds. There are also media who are very interested in eating Yunnan food with chopsticks for the first meal of Yellen's visit to China. Singapore's Lianhe Zaobao reported on the 7th that Yellen's first meal after getting off the plane was selected at a Yunnan restaurant in Sanlitun, Beijing, and chopsticks were used to eat during the meal. The restaurant's official Weibo said that Yellen loves to eat Yunnan specialty mushrooms, and ordered four portions when she saw Hand Qing.

"It is difficult for China and the United States to get rid of each other in economy and trade"

According to CNN (CNN) on the 7th, Yellen mentioned in a meeting with representatives of US companies on the same day that Beijing's decision to enact export controls on important metals needed for semiconductor manufacturing worried Washington and warned the United States and its allies that they would fight back against China's "unfair economic practices". In order to safeguard national security and interests, China's Ministry of Commerce and the General Administration of Customs issued an announcement on July 3, deciding to implement export controls on two key metals, gallium and germanium, from August 1 this year. According to Reuters on the 6th, when asked about the strategic reserves of these two key metals on the same day, the spokesman of the US Department of Defense said that the United States has strategic reserves of germanium, but there is currently no inventory reserve of gallium, and said that the United States will increase domestic mining and processing of key materials in the microelectronics and space supply chain.

Yu Xiang, a special expert at the Strategic and Security Research Center of Tsinghua University, told the Global Times reporter on the 7th that the game in the field of science and technology has become the key to the Sino-US strategic game, and the game of the semiconductor industry chain will not only disappear out of thin air in the future, but will become more intense. On the one hand, the United States benefits by disguising itself as a "victim" to provoke other countries against China; On the other hand, the United States is also making up more excuses for the Sino-US strategic game, such as blaming China's market mechanism.

"Although the geopolitical game between China and the United States is fierce and the talk of 'decoupling' is endless, the huge bilateral trade volume shows that it is difficult for the two countries to get rid of each other in economic and trade relations," the BBC said, adding that in 2022, trade between the two countries grew for the third consecutive year, with a total trade in goods reaching a record of $690.6 billion. According to a report released by the U.S.-China Business Council in May, U.S. merchandise exports to China totaled $151.3 billion in 2022, up 1.2% year-on-year. The report notes that exports to China support many sectors of the U.S. economy and benefit the livelihoods of people across the United States. China is the third largest export market for goods (2022) and sixth largest for services (2021) for the United States after Canada and Mexico, and trade in goods and services with China has created more than 1.06 million U.S. jobs.

"The U.S. should have been more low-key"

Amid tensions between China and the United States, U.S. auditors have launched a new round of inspections of U.S.-listed Chinese companies in recent weeks. Bloomberg reported on the 7th, citing people familiar with the matter, that the US Public Company Accounting Oversight Board (PCAOB) sent a team to Hong Kong, China, last month to check the 2022 audit reports of some well-known Chinese concept stock companies. PCAOB staff will inspect more than a dozen Chinese companies, including Tencent Music Entertainment Group, Didi and NetEase, people familiar with the matter said. This is larger than the first round of inspections carried out in the third quarter of last year, they added. In a statement in May, PCAOB Chairman Williams said the agency will continue to conduct on-site inspections this year, with the goal of covering 99 percent (by market capitalization) of Chinese concept companies audited by Chinese mainland and Hong Kong accounting firms.

The New York Times also mentioned that the Biden administration is preparing to impose new restrictions on U.S.-China technology trade, which may include further restrictions on advanced chips and U.S. investment in China. According to people familiar with the matter, the upcoming rules could restrict Chinese companies' access to U.S. cloud computing services "to close loopholes that previously limited China's access to advanced AI chips."

Russia's Tsargrad TV reported on the 7th that the US Treasury Secretary visited China, hoping to persuade China not to change the status quo of trade relations within 4 days, while the United States is unilaterally strengthening sanctions against China. Although the U.S. has recently been on the brink of defaulting, Yellen will try to convince China that the U.S. economy is stable and that investing in U.S. bonds remains reliable. The United States should have been more low-key to ease Yellen's work during her visit to China. RIA Novosti said that the purpose of the US Treasury minister's visit is that the United States should not only compete with China, but also avoid weakening itself.

【Global Times special correspondent in the United States, Feng Yaren, Global Times reporter, Chen Zishuai, Leng Shumei, Global Times special correspondent, Zhen Xiang, Liu Zhi】