Yellen: We seek constructive and fair economic relationship with China

US Treasury Secretary Janet Yellen stated that they seek a constructive and fair economic relationship with China but will not hesitate to protect their national security interests. The US Treasury Department shared the text of Yellen’s speech to be delivered today at Johns Hopkins University on economic relations between the US and China. Stating that the US remains committed to defending its national security, Yellen said, “In this context, we seek a constructive and fair economic relationship with China. Both countries need to be able to honestly discuss difficult issues. And when possible, we should work together for the benefit of our countries and the world.” Drawing attention to the three main goals of the US’s economic approach towards China, Yellen noted that the first of these is to secure national security interests, the interests of our allies and partners, and to protect human rights. “We will continue to partner with our allies in responding to China’s unfair practices” Stating that they will openly convey their concerns about its behavior to China, Yellen conveyed that the US will not hesitate to defend its vital interests and that although its targeted actions have economic impacts, they stem solely from concerns about security and values. Yellen emphasized that their goal is not to use these tools to gain a competitive economic advantage. Noting that they seek a healthy economic relationship with China that fosters growth and innovation in both countries, Yellen conveyed that a growing China that plays by international rules is good for the U.S. and the world. Yellen said, “Both countries can benefit from healthy competition in the economic arena. However, healthy economic competition that benefits both sides can only be sustained when competition is fair. We will continue to partner with our allies to respond to China’s unfair economic practices.” Call on China to fulfill promise to work with the U.S. Pointing out that they are also seeking cooperation on today’s pressing global issues, Yellen emphasized that since U.S. President Joe Biden and Chinese President Xi Jinping met last year, both countries have agreed to increase communication around the macroeconomy and cooperation on issues such as climate and debt distress, but that more needs to be done. Yellen called on China to fulfill its promise to work with the U.S. on these issues, noting that this is their common duty and obligation to the world and that addressing these issues together will advance the national interests of both countries. In recent years, many people have seen a conflict between the US and China as increasingly inevitable, Yellen said, adding that this stems from fears shared by some Americans that the US is in decline. Yellen stated that statements about the decline of the US have been circulating for years but have always been proven wrong. Emphasis on national security in relations with China Emphasizing that national security is of utmost importance in all US foreign relations, as well as in its relations with China, Yellen recalled that they have clearly stated that protecting certain technologies from China’s military and security apparatus is in vital national interests. Stating that these national security actions are not designed to gain a competitive economic advantage or to hinder China’s economic and technological modernization, Yellen conveyed that these policies, although they may have economic effects, are directly guided by national security considerations. Yellen emphasized that they will not compromise on these concerns even if they force them to sacrifice their economic interests. Stating that the US is not after a winner-take-all competition, Yellen noted that instead, they believe that healthy economic competition with fair rules can benefit both countries over time. “It is important that we make progress on global issues” Yellen emphasized that healthy competition can only be sustained if it is fair for both sides, noting that China has long used government support to help its companies gain market share at the expense of their foreign rivals. Pointing out that China’s industrial policy has become more assertive and complex in recent years, Yellen said that the country has expanded its support for state-owned enterprises and domestic private firms in order to dominate its foreign competitors, that it has done this in traditional industrial sectors as well as in emerging technologies, and that it has combined this strategy with aggressive efforts to acquire new technological know-how and intellectual property, including IP theft and other illicit methods. Stating that the US will pursue the goal of cooperation on major global challenges in setting the terms of its economic engagement with China, Yellen said, “It is important that we make progress on global issues regardless of our other disagreements. This is what the world’s two largest economies need.”