Yellen’s latest trip helps set a new normal for U.S.-China ties

BEIJING — U.S. Treasury Secretary Janet Yellen became the second U.S. cabinet member to visit China in a month, laying the groundwork for high-level communications between the two countries.

John Kerry, the president’s climate envoy, is also scheduled to visit China in the coming days, he told reporters New York Times. The U.S. embassy in Beijing did not immediately respond to CNBC’s request for comment.

The multiple trips mark a turnaround from earlier this year, when alleged Chinese spy balloons forced U.S. Secretary of State Anthony Blinken to postpone his planned trip to Beijing. He didn’t visit until June.

Geopolitics put pressure on the market earlier this year, Hu Yifan, regional chief investment officer and head of macroeconomics for Asia Pacific at UBS Global Wealth Management, said at a news conference on the outlook for the second half of the year on Monday.

“As long as there is dialogue and communication between China and the U.S., the market will get used to the new normal,” she said, noting that performance volatility may be less. That’s according to CNBC’s translation of her Mandarin remarks.

Official statements from both the U.S. and China have indicated plans for further talks.

“Differences should not be a reason for alienation, but rather The drive to strengthen communication China’s Ministry of Finance said in a statement on Yellen’s visit on Monday, according to a Chinese text translated by CNBC.

China’s Ministry of Finance stated that during the meeting, the Chinese side asked the US side to cancel the imposition of additional tariffs on Chinese goods and stop “putting pressure” on Chinese companies.

Aside from more talks, bilateral relations have not improved significantly.

Just days before Yellen’s arrival in China, China’s Ministry of Commerce announced imminent export controls on two metals used in semiconductor manufacturing.

Yellen confirmed at a news conference on Sunday that the United States is still considering investment restrictions on high-end Chinese technology. She said she told her Chinese counterparts that any restrictions on U.S. outbound investment would be “very narrowly targeted”.

“My intent is to make sure we don’t engage in an unintentional series of escalating actions that will damage our economic relationship with each other,” Yellen said in an interview It airs Saturday on CBS News’ “Face the Nation.”

She noted that the lack of contact between senior U.S. and Chinese officials due to the outbreak had created “a situation where misunderstandings could arise.”

“I do think my travels have been successful in building those relationships and creating opportunities for deeper and more frequent engagement at the employee level.”

Yellen’s visit last Thursday through Sunday came about three weeks after Blinken met with Chinese President Xi Jinping in Beijing. Yellen met with people close to Xi, including the recently promoted Premier Li Qiang.

“These are not the same people we’ve met before in a lot of meetings. So being able to engage with them and discuss a lot of substance is the most important thing,” a senior Treasury official told reporters at a briefing. Yellen’s visit is coming to an end.

The meeting with Vice Premier He Lifeng lasted five hours, more than double the scheduled time, the official noted.

He also leads China-U.S. economic and trade cooperation efforts, according to one of the people. state media reports Calling his meeting with Yellen “constructive.”

All in all, Yellen’s 10 hours of talks During the visit, she met Finance Minister Liu Kun and Pan Gongsheng, who was promoted to party secretary of the People’s Bank of China this month.

Yellen also met with former Vice Premier Liu He and former People’s Bank of China Governor Yi Gang, the Treasury Department said.

“Just meeting in person and getting her and her peers to know each other was a major breakthrough in itself,” said Scott Kennedy, senior advisor and chair of the trustees of China Business and Economics, a Washington, D.C.-based think tank. Strategy and International Research center.

“We expect two-way visits by other cabinet officials over the next few months,” he said. “Again, no meeting is likely to lead to a breakthrough, but the process will translate into a normalization of directional communications, which in itself will help. to maintain fragile stability.”

With about a year and a half left in the current Biden administration, high-level meetings between the U.S. and China have increased.

In prepared remarks to reporters at the end of her visit, Yellen noted the “substantial public coverage” of the U.S.-China meeting over the past two years.

“I want our relationship to reach a stage where high-level diplomacy is seen simply as a means. natural elements Manage one of the most important bilateral relationships in the world. “