The moment U.S. Treasury Secretary Janet Yellen arrived in Beijing, a rainbow appeared in the sky, which is seen as a symbol of good luck in traditional Chinese culture. Yellen stepped onto Chinese soil with a smile on her face, a gesture that raised questions about whether her trip could turn the tide for the U.S.-China relationship, which is currently at a low ebb.
Yellen is the second senior U.S. to visit China this year, after Secretary of State Antony Blinken. She has repeatedly said she is looking forward to visiting China and held brief talks with senior Chinese officials a few months ago. As one of the leaders of the United States who opposes the "decoupling" of China's economy, Yellen has issued a warning to the top level of the United States, emphasizing that if the United States "decouples" from China, the United States will face catastrophic consequences.
Yellen's four-day trip to China included not only talks with senior Chinese officials, but also intensive exchanges with representatives of Chinese and American companies, non-governmental organizations and economic experts. It is worth noting that she also invited several Chinese female economists to a dinner.
According to the information released by Yellen after the high-level talks with China, the two sides reached consensus on three main aspects: First, the two sides agreed to implement the consensus reached by the two heads of state at their meeting in Bali last year and jointly lead the right direction of China-US relations;Second, both sides agreed on the need for increased communication;Finally, China and the United States should strengthen cooperation.
While Yellen's visit to China brought positive signals, we also noted some details. There are both consensus and differences between China and the United States, and differences are the root cause of the current predicament in China-US relations. The official announcement is mainly positive, with a strong emphasis on consensus, but this does not mean that differences have been eliminated, but only selectively shunned.
At present, the details of Yellen's negotiations and communication with the Chinese side on specific issues have not been released, and the information released is mainly based on principles or strategies, and there is a lack of information on specific matters. Obviously, Yellen's visit is not just for the sake of image display, and all the public friendly activities are to pave the way for substantive negotiations.
Prior to Yellen's visit, China and the United States were already discussing the purpose of her trip, including lobbying China to increase its holdings of U.S. Treasury bonds, persuading China to further open up its financial markets, and strengthening cooperation with U.S. companies.
These are the issues that Yellen must address, and the root cause of her rush to visit China — that the United States needs China's help. However, China will not be able to easily accede to Yellen's request, and the United States will have to pay a price for these tangible benefits.
Although Yellen is the Treasury secretary and her powers are limited, there are serious differences and frictions between China and the United States, even in the economic and trade fields. For example, the United States is increasing restrictions and sanctions on China's chip industry, imposing sanctions on more than 1,300 Chinese companies, and has not yet lifted the additional tariffs on Chinese goods during the Trump era, and restricting exports and investment in China's high-tech fields.
China has responded with a response, most notably the day before Yellen's arrival in Beijing, China's Ministry of Commerce and the General Administration of Customs announced export restrictions on gallium and germanium-related products. This is tantamount to posing a threat to Western semiconductor companies, and Yellen will certainly negotiate with the Chinese side on this issue in Beijing.
Yellen enjoys great prestige in the United States, but the powers of the Treasury Secretary are limited. She can negotiate with the Chinese side on behalf of the White House, but it is unlikely that the results will be achieved soon, since she has no decision-making power. Yellen and the entire Western bloc are well aware that China has a near monopoly on gallium products, and the West is unlikely to find an alternative in the short term. China's approach is not intended to block the West entirely, but rather as a countermeasure to Western sanctions.
The next negotiations will revolve around conditions. One of Yellen's tasks on this trip is to figure out the conditions on the Chinese side, and then return home to negotiate and see how much she can accept. The negotiations are expected to be a tug-of-war, with the two sides even battling in different areas, beyond the control of one finance minister.
The differences between China and the United States exist not only in the economic, trade and financial fields, but also in the political and military spheres, especially on the Taiwan issue. Yellen's visit barely touched on this issue because it was not something she could discuss.
The upcoming NATO summit in Lithuania will discuss the issue of treating China as a "systemic threat" and taking corresponding measures to restrict and suppress China.
Therefore, although Yellen's visit to China has brought positive signals, these signals are limited to the consensus part of the economic and trade field, and no substantial progress has been made in resolving differences. Judging from the previous statement issued by China, the United States has made a major misjudgment in its perception of China. If the United States fails to make fundamental changes in this regard, it will be difficult to reverse the deteriorating deadlock in Sino-US relations by relying only on partial improvements in the economic and trade fields.