Following the recent visit of US Secretary of State Antony Blinken to Beijing, which reopened channels for high-level exchanges between the US and China, US Treasury Secretary Janet Yellen is reportedly preparing for a visit to China in July. Business insiders believe that the focus of the visit will be on official economic engagement, as bilateral relations have been strained due to Washington’s misperceptions.
Yellen’s upcoming trip is expected to address concerns regarding the US debt ceiling, a pressing issue that requires finding buyers for the debt and discussions on debt repayments for developing countries, which necessitate China’s involvement. Bloomberg reported that Yellen plans to hold high-level economic talks with her Chinese counterpart, Liu Kun, marking the second visit by a US cabinet official to Beijing following the recent downturn in relations between the two countries.
Yellen, known for her background as a professional macroeconomist and her understanding of the importance of bilateral cooperation to the US economy, is viewed as a rational US official with a less hawkish stance on China. Chinese experts highlight the detrimental effects of the lingering tariffs from the Trump era on American consumers, as well as the challenges posed by high inflation and growing debt ceiling problems in the US. Yellen has previously expressed her willingness to visit China and emphasized the significance of maintaining a healthy economic relationship, cautioning against decoupling. However, she has also stressed that national security takes precedence, even if it impacts the economic ties with China.
While the Chinese Foreign Ministry has not confirmed Yellen’s reported visit, there is a belief among experts that there is a limited window of opportunity to repair US-China relations. They emphasize the need for sincere actions from Washington instead of creating further complications. Despite the recent easing of open hostility toward Beijing, the US has continued to provoke tensions in various ways, including the fentanyl issue, speculations about a Chinese spy base in Cuba, and personal attacks on Chinese leaders.
Lü Xiang, a research fellow at the Chinese Academy of Social Sciences, noted that Yellen’s potential visit aligns with the consensus reached between the two heads of state in Bali, Indonesia in November 2022. He emphasized that Yellen’s economic expertise and understanding of the US’ challenges make her visit urgent and necessary. However, experts also caution that while the opportunity for improving bilateral relations still exists, the Biden administration’s major containment strategy toward China remains unchanged.
As the Biden administration finalizes new investment restrictions aimed at China, experts believe that these measures may undermine the US government’s sincerity in engaging with China and could become a bargaining chip in upcoming high-level talks. While it is not yet a “now or never” situation, experts stress that the window of opportunity for improving relations is limited, urging the US side to recognize this reality.
The reported visit of US Treasury Secretary Janet Yellen to China comes at a critical juncture as both countries strive to revive economic engagement amidst strained bilateral ties. The success of this visit will depend on the willingness of both sides to address key issues and find common ground for cooperation.