While it is undoubtedly an encouraging sign of serious shared interest in stabilizing their relations, as well as the pragmatism present in both sides’ approaches to the rocky China-United States relationship, US Treasury Secretary Janet Yellen’s ongoing visit may also indicate bilateral ties are on the threshold of a challenging new stage.
If the consensus on stabilizing bilateral ties by keeping lines of communication open represents the first stage of a strategic reset, the two sides now face a new one that will put their claims of responsibly managing bilateral ties to the test. It is a test that will prove tough for both, because, increasingly, they are getting to the roots of the problems that have strained bilateral ties, where neither sees much room for compromise.
Before she embarked on the trip, on her way to China, and then in Guangzhou, Yellen’s remarks centered on Chinese “manufacturing overcapacity”, whose economic fallout she said would hurt the US, the rest of the world, and finally China itself. This line is expected to continue in Beijing until the end of her visit.
Yellen brought with her Washington’s growing worries about alleged Chinese overproduction of electric vehicles, solar panels, semiconductors and other goods allegedly flooding global markets. Its request is Beijing shift away from what it claims is Beijing’s subsidy-driven economic model and return to market-oriented reforms.
This will prove an extremely hard sell, because it is fundamentally at odds with Beijing’s view, which is that it is Washington that is using subsidies and other measures to distort the market. Beijing sees no need for such a “return” considering its present path is a “higher degree of opening-up”, which by its very nature requires further reforms. As for China’s alleged “unfair trade practices”, Washington is simply employing a double standard. Yellen’s Chinese hosts have complained about US tariffs on Chinese imports, sanctions on Chinese companies, and especially the punitive moves against TikTok.
Yellen has won Chinese friends for repeatedly arguing against the “decoupling” of the two economies, which is why many have seen her as being the best messenger to convey Washington’s appeal for a “level playing field”.
Her July 2023 China visit led to the forming of economic and financial “working groups” in both governments. But things are different this time. While in Washington’s eyes they are a growing threat, China-made EVs, power batteries and solar panels happen to be among the leading wave of the country’s new quality productive forces. No country should seek to suppress another’s development, as the Chinese leader has told his US audiences on multiple recent occasions.
The differences between the two sides are “not going to be solved in an afternoon or a month”, as Yellen rightly said.
But continuous communication may provide “a structured way” in which the two sides can “continue to listen to one another and see if we can find a way forward that will avoid conflict”.
That is certainly a foundation to build on that needs reinforcing with solid means of support.
Editorial, China Daily
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