Treasury Secretary Janet Yellen has indicated that she will likely step down from her current position after President Joe Biden’s term ends in January. However, before her departure, she expressed the possibility of meeting with her Chinese counterpart in China.
During the Texas Tribune Festival in Austin on September 7, Yellen stated, “I certainly may go back there. I would welcome a visit by my Chinese counterpart, and my guess is that we will have, one way or another, a visit.”
In April of this year, Yellen met with Vice Premier He Lifeng during her visit to China. At that time, she urged China to address its manufacturing overcapacity in areas such as electric vehicles, lithium batteries, and solar panels. Yellen emphasized that the United States would not tolerate another influx of cheap manufactured exports from China.
Yellen believes that the relationship between China and the United States needs to be prioritized and nurtured by the next U.S. administration. She stressed the importance of high-level talks between both countries as well as discussions among agency personnel to address their differences and prevent tensions from escalating.
The Treasury Secretary also highlighted climate issues and debt relief for impoverished nations as potential areas for cooperation between China and the United States. She emphasized that maintaining relationships with various countries would be crucial in case of a cross-border financial crisis.
Jay Shambaugh, undersecretary for international affairs at the Treasury Department, is expected to lead a delegation on an upcoming trip to China to discuss economic matters.
Last year in September, both countries established two working groups dedicated to economic and financial discussions. The economic working group is co-led by Shambaugh and Liao Min (China’s vice finance minister).
Shambaugh has expressed concerns about China’s macroeconomic imbalances and non-market policies posing risks not only for American workers but also for businesses worldwide. He pointed out that China’s production capacity for lithium-ion batteries and solar modules is projected to exceed global demand by two or three times within a few years.
To mitigate these concerns about overcapacity issues in China’s industries like electric vehicles and renewable energy products such as solar cells or lithium-ion batteries; tariffs have been imposed by various countries including Canada imposing 100 percent tariff on imports of Chinese electric vehicles recently.
If Yellen does travel to China soon after Sullivan’s recent trip where he met senior Chinese military officials including Xi Jinping; it will mark an important diplomatic engagement between US-China relations since it was eight years ago when last US national security adviser visited Beijing.
