Yellen Assures No US–China Decoupling as Talks With Chinese Counterpart in San Francisco Begin

U.S. Secretary of the Treasury Janet Yellen looks on during a bilateral meeting with Chinese Vice Premier He Lifeng at the Ritz Carlton Hotel in San Francisco on Nov. 9, 2023. Justin Sullivan/Getty Images

Treasury Secretary Janet Yellen on Thursday began two days of talks with Chinese Vice Premier He Lifeng in San Francisco, a meeting that Republicans have expressed concerns about.

It is the second meeting between Mr. He and Ms. Yellen since July, when the treasury secretary visited China. Their talks come just days before the start of the Asia-Pacific Economic Cooperation (APEC) summit, where President Joe Biden and Chinese leader Xi Jinping are expected to meet.

In remarks welcoming Mr. He, Ms. Yellen said she wants to have an “open and substantive discussion” on bilateral economic ties.

“The United States has no desire to decouple from China: A full separation of our economies would be economically disastrous for both our countries, and for the world,” Ms. Yellen said.

This is not the first time that Ms. Yellen has assured China that the United States does not seek to decouple. She expressed the same opinion during her China trip, and she repeated it in an address to the Asia Society earlier this month.

However, some experts do not share Ms. Yellen’s view, arguing that the United States should decouple, at least in some high-risk sectors, to address security concerns about being overly dependent on China.

“We seek a healthy economic relationship with China that benefits both countries over time,” she added. “When we have concerns about specific economic practices, such as those that prevent American firms and workers from competing on a level playing field, we will communicate them directly.”

In September, the American Chamber of Commerce in Shanghai found in its annual poll that U.S. firms’ China outlook was the worst in decades. Regulatory challenges facing U.S. firms included a lack of intellectual property protection, data localization, and other cybersecurity requirements.

Ms. Yellen emphasized the importance of protecting U.S. national security, a remark she also made during her trip to China.

“We will also further our discussions on the use of economic tools for national security purposes,” she said. “The United States will continue to take targeted actions to protect our and our allies’ national security.”

Last month, Washington stepped up its restrictions on semiconductor exports to China, in an effort to slow China’s development of advanced military capabilities.

Aside from bilateral economic issues, Ms. Yellen said she will also talk to her Chinese counterpart about global challenges such as climate change and debt distress in low-income countries and emerging markets.

U.S. Treasury Secretary Janet Yellen (L) shakes hands with Chinese Vice Premier He Lifeng during a meeting at the Diaoyutai State Guesthouse in Beijing on July 8, 2023. Pedro Pardo/POOL/AFP via Getty Images

‘Dangerous Adversary’

Ahead of their meeting, Sen. Marsha Blackburn (R-Tenn.) and Republican presidential hopeful Nikki Haley both expressed their concerns.

“Secretary Janet Yellen’s willingness to meet with Chinese Vice Premier He Lifeng in San Francisco is further evidence that the Biden administration does not treat Communist China as the dangerous adversary they are,” Ms. Blackburn said in a Nov. 8 statement.

The senator added: “Instead of pursuing a ‘constructive economic relationship’ with Beijing, Secretary Yellen should hold our chief adversary accountable for their espionage activities within the U.S., aggression against our ally Taiwan, and myriad human rights abuses. It’s time we reduce our economic reliance on China.”

During a recent podcast, FBI Director Christopher Wray said that “the Chinese Communist Party is the number one threat to innovation, period.”

“China has made economic espionage, stealing others’ work and ideas, a central component of its national strategy,” he said. “China has long targeted businesses with a web of techniques all at once—cyber intrusions, human intelligence operations, seemingly innocuous corporate investments and transactions.”

He added, “Beijing’s economic espionage campaign hurts our nations and our people: individual engineers, entrepreneurs, families whose hard work and livelihoods are stolen.”

Ms. Haley suggested that Ms. Yellen will fail to be assertive during her talks with Mr. He.

“What will Janet Yellen say when she meets w/ China today? She *should* say no more normal trade until you stop killing Americans w/ fentanyl. No more spying & tech theft. Will she say that? No,” Ms. Haley wrote on X, formerly known as Twitter, on Nov. 9. “Dictators only respond to strength. Quit playing nice.”

Mexican cartels have been buying precursor chemicals from China to make fentanyl and then shipping finished products to the United States. In 2022, 73,654 deaths in the United States were attributed to fentanyl overdose, twice as many as in 2019.