Treasury Secretary Janet Yellen says China trip

After several days of meetings with senior Chinese officials covering major issues like national security, technology and trade, Treasury Secretary Janet Yellen said her trip to Beijing was “successful” in that it laid a foundation for ongoing diplomacy with the United States.

“We have a new team on the economic side in Beijing, and it’s important to establish person-to-person relationships and to open ongoing channels of communication, where concerns can be aired and discussed,” Yellen told “Face the Nation” moderator Margaret Brennan during a “Face the Nation” interview that aired on Sunday morning. “And I do think my trip has been successful in forging those relationships and creating the opportunity for a deeper set of more frequent contacts at our staff levels.”

Yellen gave the interview from Beijing, where had since Thursday attended around 10 hours of meetings with top Chinese leaders, including Premier Li Qiang, Vice Premier Liu He, Finance Minister Liu Kun and Pan Gongsheng, deputy governor of the People’s Bank of China. 

Before departing Sunday for the U.S., Yellen held a news conference where she described the talks as “direct, substantive and productive,” and said the key takeaway from her meetings was that the U.S. is pushing for “an economic relationship that is mutually beneficial in the long-term,” despite competition and continued tensions between the world’s two largest economies. Yellen told reporters she communicated in those meetings that healthy economic competition is sustainable and benefits both countries.  

The treasury secretary had expanded upon those sentiments during her earlier conversation with Brennan on “Face the Nation.”

“What I can tell you is that I had a very constructive visit. I received a warm welcome and had a very substantive series of meetings,” Yellen said, responding to a question about whether she felt tensions had been “smoothed over” over the course of her visit.

“We had substantive conversations about the global economy, developments in our own economies, financial markets and a list of concerns that each of us brought to the table that we agreed to follow up on over time,” she continued. Some of those concerns involved treatment of U.S. workers and businesses, which Yellen touched upon at a roundtable discussion last week with U.S. businesspeople operating in China, including representatives from Boeing, Bank of America and Cargill.

“I’ve been particularly troubled by punitive actions that have been taken against U.S. firms in recent months,” Yellen said at the time. She also criticized China’s new export restrictions on gallium and germanium, two minerals necessary for semiconductor technologies.

Nick Burns, the U.S. Ambassador to China, told “Face the Nation” last month that multiple American companies had been experiencing intimidation from Chinese authorities and referenced a new anti-espionage law that could give Beijing more power and put foreign businesses at risk. Asked if Chinese officials agreed to protect U.S. businesspeople from intimidation moving forward, Yellen said it was a point of discussion during her meetings.

“I had the chance to meet with American businesses and to hear about their concerns … and certainly in my meetings, that is a concern that I raised,” she told Brennan on Sunday. “It’s something that we will have further conversations about and try to address over time.”

Yellen’s trip came amid ongoing trade disputes between Washington and Beijing, and in the immediate wake of China’s anti-espionage law, which took effect on July 1. The State Department also updated its travel advisory notice for China last month to note the potential “risk of wrongful detentions,” and warned Americans to reconsider visiting there. Yellen said from the outset that the overarching goal of her talks with Chinese officials was to find common ground, and although “we will take action to protect our national security when needed … this trip presents an opportunity to communicate and avoid miscommunication or misunderstanding.”

“My purpose is to make sure that we don’t engage in a series of unintended escalatory actions that will be harmful to our overall economic relationship with one another,” Yellen said on “Face the Nation” Sunday. “And we have had very little contact, both senior officials and also just the American people and the Chinese people, who’ve had very little contact with one another over the last several years, in part because of COVID. And that’s a situation where misunderstandings can develop.”

China recently announced controls on the export of two of them that are essential for computer chips, which Yellen criticized this weekend at a roundtable with Chinese business leaders. When asked by Brennan if this action by China was retaliatory, Yellen said “potentially.” 

“Well, I certainly expressed concern about this action, and contrasted it with the actions that we’ve taken,” she said. “Our own actions are narrowly targeted to address national security concerns, and it’s not clear that the actions that the Chinese took are similarly narrowly targeted at their national security concerns.”

There is concern in China, as well in the U.S., about the potential slowdown of the Chinese economy. These fears come as there are fears in the U.S. about a recession. Yellen told Brennan that she cannot take the possiblity of a recession “completely off the table.”

“But we would expect, with the job market as strong as it is now, to see a slower pace of ongoing job gains,” Yellen said. “Prime age labor force participation is at the highest level in several decades, so we’ve seen this strong job market attract workers back to it. But as that stabilizes at a high level, we should expect the monthly job gains to be coming down toward a more normal level. “