The US is not attempting to “decouple” its economy from China because doing so would destabilise the global market, Treasury Secretary Janet Yellen said on Friday during a visit to Beijing. She maintained that “healthy” rivalry benefits both countries.
Yellen is in China for four days, with the goal of forging a “stable and constructive relationship” between the two countries.
“We seek to diversify, not decouple,” Yellen emphasised. “A decoupling of the world’s two largest economies would be destabilising for the global economy and virtually impossible to implement.”
Yellen’s trip follows that of US Secretary of State Antony Blinken, who visited Beijing last month in an effort to defuse tensions.
The Treasury official expressed “concerned” about export limits after Beijing stated on Monday that special licences will be required to export gallium and germanium, two essential metals used in computer chips, beginning next month.
“We are still evaluating the impact of these actions, but they remind us of the importance of building resilient and diversified supply chains,” Yellen said during a meeting with US businesses in Beijing.
On Friday, China’s Finance Ministry published a statement expressing optimism that the US would take “concrete actions” to improve bilateral economic and trade cooperation.”There are no winners in a trade war or in decoupling and ‘breaking chains,’” the statement said.
For several months, Washington and Beijing have been at odds over semiconductors and other key technologies.
Last October, US President Joe Biden’s administration proposed measures aimed at strengthening US technological capabilities while limiting China’s access to breakthrough technologies. Washington imposed strict export controls, effectively shutting China off from some semiconductor chips manufactured on US equipment.
Yellen stated that she had “made clear” in her conversations with the Chinese government that “actions we take to protect our national security are designed to be narrowly targeted.”
Beijing has taken limited action in response thus far, but did strike in May by prohibiting memory chips manufactured by Micron, the largest US producer, claiming that the company had failed a security check.
