Yellen Aims to Smooth Things Over

From export restrictions to US President Biden’s comparison of China’s President Xi to a dictator, the relationship between China and the US is currently extremely tense. In this situation, US Treasury Secretary Yellen is traveling to Beijing. Observers interpret Janet Yellen’s visit to China as a positive signal from both the Chinese and US sides. The visit of the US Treasury Secretary is taking place despite President Joe Biden comparing China’s head of state and party chief, Xi Jinping, to a dictator and despite new trade restrictions.

In Beijing, Janet Yellen is likely to be perceived as a representative of the US government that is not overly confrontational.

Collaboration between China and the US

This is certainly due to the fact that the American Treasury Secretary reiterated in June in Paris that the world’s two largest economies could and should cooperate on global issues.

Earlier this year, the US Treasury Secretary stated that the world’s two largest economies bear the responsibility to “work together on global issues.” According to Yellen, this is something that can be done and is expected of them by the world.

Janet Yellen plans to hold talks in China for four days. Following US Secretary of State Antony Blinken’s visit to Beijing in June, this is another attempt to stabilize the extremely poor relations between the two superpowers.

Tense Relationship

The list of contentious issues is long: Chinese human rights abuses, China’s friendship with Russia, threats from the communist government towards Taiwan, and US restrictions on microchips. The Washington administration is trying to prevent China from obtaining high-performance semiconductors. One concern is that China could use them for its military.

As a result, certain microchips and the machines capable of producing them can no longer be exported to China. The communist state and party leadership are angry and have recently introduced export controls on two materials that are crucial for global high-tech production. Starting next month, special licenses will be required to export gallium and germanium from China, the world’s largest producer of these metals.

Chinese Foreign Ministry spokesperson Mao Ning stated on Tuesday that the export controls on the two raw materials are not discriminatory and do not target any particular country.

Countermeasures in response to US restrictions

However, observers clearly see the export controls as a countermeasure to US restrictions. In the Communist Party’s propaganda newspaper, “China Daily,” former Deputy Minister of Commerce Wei Jianguo described the measures as a well-thought-out first hard blow.

If the restrictions on the Chinese high-tech sector continue, the countermeasures will escalate.