UPDATED at 2:45 p.m. ET on April 8, 2024.
Beijing says the United States has reiterated that both sides do not “seek to decouple” even as the Biden administration intensified criticism of the Chinese for flooding markets with renewable energy products under a policy to stimulate flagging growth.
China’s state-owned Xinhua News Agency reported Sunday Treasury Secretary Janet Yellen, on an official visit to China, said the U.S. “appreciates the progress made in U.S.-China economic dialogue and cooperation, does not seek ‘decoupling’ from China.”
Xinhua reported that the remarks were made during Yellen’s “candid” meeting with the Chinese Premier Li Qiang at the Great Hall of the People in Beijing. It did not mention any reciprocal comment from Li regarding decoupling.
At a press conference after the meeting, Yellen said she told Li and other Chinese officials that the U.S. concern about an industrial overcapacity in China “flooding” foreign markets with cheap exports “is not animated by anti-China sentiment or a desire to decouple.”
“During conversations this week, I underscored again that the United States does not seek to decouple from China,” Yellen said.
“Our two economies are deeply integrated, and a wholesale separation would be disastrous for both of our economies,” she said. “Even as we take actions to diversify our supply chains, we seek to preserve the broader trade and investment relationship.”
Yellen’s meeting with Li is also the highest level of contact between the world’s two biggest and rivaling economies since the phone call between the U.S. President Joe Biden and his Chinese counterpart Xi Jinping last week.
The two leaders discussed China's "destabilizing actions" against U.S. ally the Philippines in the South China Sea, its support for Russia in the war in Ukraine, a new security law in Hong Kong and Taiwan's upcoming presidential inauguration, a U.S. official had said.
The phone call came ahead of Yellen’s visit and a pending trip by U.S. Secretary of State Antony Blinken “in the coming weeks,” according to the official.
Prior to her China trip where her first leg began in the southern city of Guangzhou, Yellen had raised concerns of China's excess manufacturing capacity, accusing Beijing of " flooding" markets by heavily subsidizing products like electric vehicles, lithium-ion batteries and solar panels to revive economic and export growth.
But during her meeting with Li in Beijing, the Chinese premier pushed back on Yellen’s assertion, according to Xinhua which quoted him as saying the U.S. should “refrain from turning economic and trade issues into political or security issues, and view the issue of production capacity objectively and dialectically from a market-oriented and global perspective.”
Li stressed that the development of China's new energy industry will make important contributions to the global green and low-carbon transition. China hopes the two countries, whose economic interests are deeply intertwined, will be partners rather than adversaries for a win-win cooperation, he added.
According to a U.S. Treasury Department readout Sunday, the meeting between Yellen and Li was "frank and productive," where sheraised issues of concern, including industrial overcapacity in China and the impact that could have on American workers and firms. She also emphasized the importance of working together on global challenges, including debt distress in low-income and emerging economies.
This year is an election year in the United States, and the Chinese economy is facing a series of severe challenges involving pillar industries such as real estate and exports, as well as debt and employment.
Sunday’s meeting was Yellen’s second face-to-face meeting with Chinese officials in nine months to discuss thorny U.S.-China trade issues.
According to international media reports, Yellen told Li that bilateral relations are now more stable because the two sides can have “difficult” discussions. But she stressed, “That doesn’t mean ignoring our differences or avoiding difficult conversations. It means understanding that we can only make progress if we communicate with each other directly and openly.”
Reuters quoted a senior U.S. Treasury Department official as saying after the meeting that the two sides discussed in detail China’s industrial overcapacity problem and the government support that contributes to the problem. Li has shown a willingness to let the U.S. and Chinese economic teams explore the issue further.
Translated by RFA Staff. Edited by Mike Firn and Taejun Kang. Updated to include comments from Janet Yellen.