Treasury's Yellen to visit China this week to expand communications

[July 03, 2023]  By Andrea Shalal

WASHINGTON (Reuters) - U.S. Treasury Secretary Janet Yellen will travel to Beijing from July 6-9 for meetings with senior Chinese officials on a broad range of issues, including U.S. concerns about a new Chinese counterespionage law, a senior Treasury official said on Sunday.

Yellen's long-anticipated trip is part of a push by President Joe Biden to deepen communications between the world's two largest economies, stabilize the relationship and minimize the risks of mistakes when disagreements arise, the official told reporters.

It comes just weeks after Secretary of State Antony Blinken visited Beijing and agreed with Chinese President Xi Jinping to stabilize ties and ensure the two countries' intense rivalry does not veer into conflict. China protested loudly when Biden subsequently referred to Xi as a "dictator," but analysts say the remark had little impact on efforts to improve ties.

The Treasury chief plans to tell China's new economic team that Washington will continue to defend human rights and its own national security interests via targeted actions against China, but wants to work with Beijing on urgent challenges such as climate change and debt distress faced by many countries.

"We seek a healthy economic relationship with China, one that fosters growth and innovation in both countries," the official said. "We do not seek to decouple our economies. A full cessation of trade and investment would be destabilizing for both our countries and the global economy."

The official, speaking on condition of anonymity, declined to give details on which Chinese officials Yellen would meet in Beijing. A second administration official told Reuters that Yellen was expected to meet the Chinese Vice Premier He Lifeng.

Yellen would underscore Washington's determination to strengthen its own competitiveness while responding with allies to what Washington calls "economic coercion" and unfair economic practices by China, the first official said.

U.S. Treasury Secretary Janet Yellen speaks during a news conference at the Treasury Department in Washington, U.S., April 11, 2023. REUTERS/Elizabeth Frantz/File Photo

One clear area of concern involved China's new national security and espionage law, and the potential implications for foreign and U.S. firms, the official added.

"We have concerns with the new measure, and how it might apply, that it could expand the scope of what is considered by the authorities in China to be espionage activity," the official said, citing possible spillovers to the broader investment climate and the economic relationship.

While no major "breakthroughs" were expected, Treasury officials hope to have constructive conversations and build longer-term channels of communication with China's new economic team, including at the sub-cabinet level, the official said.

U.S. officials would also reiterate concerns about human rights abuses against the Uyghur Muslim minority, China's recent move to ban sales of Micron Technology memory chips, and moves by China against foreign due diligence and consulting firms.

Yellen would also talk with Chinese officials about a long-awaited U.S. executive action curbing outbound investment in China in certain critical sectors, and "make sure they don't think something is more sweeping than it is or than it's intended to be," the official said.

(Reporting by Andrea Shalal; editing by Ross Colvin and Nick Zieminski)

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