Talks will help ease trade tensions but breakthroughs unlikely, experts say

Chinese Ambassador to the United States Xie Feng (right) meets US Secretary of Treasury Janet Yellen in the United States, July 3, 2023. (PHOTO / CHINESE EMBASSY)

US Treasury Secretary Janet Yellen’s first trip to China will help to stabilize relations and ease bilateral trade tensions, political advisers and experts from both countries have said, although they warned it is unlikely to yield significant breakthroughs.

“If US Secretary of State Antony Blinken’s visit last month to China was a diplomatic ice-breaking journey for bilateral relations, Yellen’s visit holds even greater practical significance,” said Zhao Yongsheng, a professor at the Institute of Regional and International Studies at the University of International Business and Economics in Beijing.

Yellen is scheduled to visit from July 6 through July 9, according to China’s Ministry of Finance. Her visit comes close on the heels of Blinken’s trip last month.

“Yellen is a scholar-politician in the field of economics, and her focus during the long-awaited visit revolves around the economic and trade relationship between China and the United States,” Zhao said.

“Everybody knows that the trajectory of US-China relations is largely determined by their economic and trade interactions. So the visit is quite crucial for the bilateral ties as tensions between China and the US endure.” 

Experts also said that the spillover risks of the US piling up its national debt and US sanctions on Chinese tech companies are among the main areas of concern on which Chinese officials are expected to declare their standpoint during talks with Yellen. 

“Yellen’s trip indicates that the two countries are resuming regular channels of communication, conveying their mutual intention to move forward and ease the tense situation,” said Zhang Xiaotao, dean of the School of International Trade and Economics at Central University of Finance and Economics. 

Yellen’s long-awaited visit comes as China-US economic ties remain plagued by broader geopolitical tensions and disputes in multiple areas, such as semiconductor technology, supply chains, and debt issues. 

Senior financial officials of China and the US can express their views and opinions more clearly during their face-to-face conversations, said Wen Laicheng, an expert at the finance ministry’s China Government Debt Center. “The visit, from this perspective, is highly important and positive.” 

While in Beijing, Yellen plans to discuss with Chinese officials the importance of the two countries responsibly managing their relationship, communicating directly about areas of concern, and cooperating to address global challenges, according to the US Department of the Treasury. 

Zhang Lianqi, a member of the Standing Committee of the 14th National Committee of the Chinese People’s Political Consultative Conference, the country’s top political advisory body, said that US suppression of China’s semiconductor and other industries is expected to be the key topic of discussion. 

Experts cautioned that it is unlikely that a single visit by a senior US financial official would achieve substantial progress in resolving the deeply rooted disagreements between the two sides.

Although Yellen has called the notion of an economic “decoupling” from China “disastrous”, she is still expected to emphasize the strategy of “de-risking” and insist on the concept of economic competition, Zhang said. 

“I don’t expect a landmark breakthrough. But the meeting could lead to stable — at least not worsening — relations during the remainder of Biden’s term,” said Gary Hufbauer, a senior fellow and trade expert at the Peterson Institute for International Economics, a US think tank in Washington, DC.

Yellen is expected to meet China’s new economic team, including Chinese Vice-Premier He Lifeng, according to US media reports. 

On July 3, Yellen met with Xie Feng, the Chinese ambassador to the US, as the latter called for efforts to bring Sino-US relations back onto the right track. 

Healthy and stable Sino-US ties are beneficial to both countries and are in line with the broad-based expectations of the international community, Xie said during their meeting.

Contact the writers at huanxinzhao@chinadailyusa.com