Yellen Arrives in China for Talks as Beijing’s Unfair Trade Practices Come Under Scrutiny

U.S. Treasury Secretary Janet Yellen arrives at Beijing Capital International Airport on July 6, 2023. （Mark Schiefelbein /POOL/AFP via Getty Images)

U.S. Treasury Secretary Janet Yellen arrived in China on July 6 to begin a four-day visit that has drawn concerns over the Biden administration’s continued effort to engage the regime in Beijing.

Ms. Yellen was greeted by Chinese officials led by Yang Yingming, director general of China’s Finance Ministry’s international cooperation department, as well as U.S. Ambassador to China Nicholas Burns, at Beijing Capital International Airport, according to China’s state-run media.

U.S. Treasury Secretary Janet Yellen (R) shakes hands with U.S. Ambassador to China Nicholas Burns (L) as Chinese official Yang Yingming looks on after Yellen arrived at Beijing Capital International Airport on July 6, 2023. Mark Schiefelbein/POOL/AFP via Getty Images

Ms. Yellen’s trip is part of the Biden administration’s continued effort to deepen communication with the Chinese Communist Party (CCP), following a rare trip to China by Secretary of State Antony Blinken in June. During that trip, Mr. Blinken met with Chinese leader Xi Jinping, and they engaged in a “robust conversation,” although no major breakthroughs came out of the meeting.

“I am glad to be in Beijing to meet with Chinese officials and business leaders,” Ms. Yellen wrote on Twitter shortly after landing in the Chinese capital.

“We seek a healthy economic competition that benefits American workers and firms and to collaborate on global challenges. We will take action to protect our national security when needed, and this trip presents an opportunity to communicate and avoid miscommunication or misunderstanding.”

It remains to be seen if Ms. Yellen can reach any agreement with Chinese officials amid the CCP’s continuing unfair trade practices and espionage activities against U.S. companies and institutions. Regardless, the Treasury secretary has already made it clear that the United States won’t seek to decouple from China—a policy pushed by some Republicans and experts—saying in a speech in April that doing so would be “disastrous” for both nations.

The American Chamber of Commerce in China, in its annual survey on the business environment in China published in March, stated that “inconsistent regulatory interpretation and unclear laws and enforcement” are among the top five business challenges its members face in 2023.

“Nearly one-quarter of members report their top IP challenge is the difficulty in prosecuting IP infringements in court or via administrative measures,” the report reads.

(L-2) Treasury Secretary Janet Yellen looks on as U.S. President Joe Biden speaks during a cabinet meeting at the White House on June 6, 2023. Andrew Caballero-Reynolds/AFP via Getty Images

Ahead of Ms. Yellen’s arrival in China, Sen. Marsha Blackburn (R-Tenn.), who sits on the Senate Finance Committee, took to Twitter to say that the United States must deal with China from a position of strength.

“Janet Yellen is traveling to Beijing on Thursday to meet with senior Chinese officials to discuss how to ‘responsibly manage our relationship,’” the Tennessee Republican wrote, citing a statement from the Treasury Department. “In order to take on China, we must pursue a policy of peace through strength, not peace through appeasement.”

Anders Corr, principal at the New York-based political consultancy firm Corr Analytics and an Epoch Times contributor, criticized the timing of the secretary’s trip.

“Yellen’s trip to China in the midst of >70,000 US fentanyl deaths annually and willful noncooperation on counternarcotics by Beijing sends a fatally weak message to the Chinese Communist Party,” Mr. Corr wrote on Twitter on June 5. “Mistake after mistake from the Biden administration.”

Mexican cartels have been buying precursor chemicals from China to make fentanyl and then shipping finished products to the United States. On June 23, the Department of Justice announced charges against four Chinese chemical manufacturers and eight Chinese nationals for alleged crimes related to the production, distribution, and sales of fentanyl.

Concerns

Grant Newsham, a retired U.S. Marine colonel and now a senior research fellow at the Japan Forum for Strategic Studies, expressed concerns about the Biden administration possibly making concessions to communist China to set up these face-to-face meetings in China.

“If it goes like it’s happened in the past, the Americans will offer some concessions to get more talks from the Chinese as a show of good faith,” Newsham, who also is an Epoch Times contributor, told NTD, the sister media outlet of The Epoch Times. “That’s one of my biggest concerns.

“If I am wrong about this, I'll be pleasantly surprised about that. But that’s what I think’s going to happen. We’ve seen this before.

“It’s almost a repeatable process ... we go and talk we offer something in good faith. The Chinese don’t really change much.”

The CCP appears to have toughened its stance ahead of Ms. Yellen’s trip. On July 3, China’s Ministry of Commerce announced export restrictions on gallium and germanium, which are metals critical to the manufacturing of semiconductors.

According to the Critical Raw Materials Alliance, China produces 80 percent of the world’s gallium and 60 percent of germanium.

China’s hawkish state-run media Global Times, in an article on Ms. Yellen’s trip published on June 27, warned that the window to repair U.S.–China relations is closing and thus that “Washington needs to make sincere moves rather than creating new troubles.”

In response to the Chinese regime’s new export controls, international lawyer Dan Harris said Beijing just provided another reason for companies to move their manufacturing capacities out of China.

“My law firm was already experiencing an uptick in companies seeking our help to exit China, and this will no doubt add to this,” Mr. Harris wrote on Twitter on July 4.

Frank Fannon, managing director of Fannon Global Advisors and a nonresident senior fellow at the Atlantic Council, wished Ms. Yellen “good luck” in China, following Beijing’s announced export restrictions.

“Tough job when the CCP narrow or reject areas of ‘shared interest’ daily,” Mr. Fannon wrote on Twitter on July 5. “The U.S. should seize the opportunity to lead free nations with clarity and resolve. Start with strong & unambiguous rules that U.S. taxpayer-funded IRA subsidies will NOT benefit PRC minerals or tech providers.”

The People’s Republic of China (PRC) is the communist regime’s official name.

Under the Biden administration’s Inflation Reduction Act (IRA), about $370 billion in subsidies and trade privileges will be available to encourage clean manufacturing in the United States. However, there are concerns that Chinese companies may benefit from the electric vehicle tax credit embedded in the IRA.

Newly Revised Espionage Law

Compounding the problems that foreign companies may face in China is Beijing’s newly amended anti-espionage law, which came into force on July 1.

The sweeping legislation broadens the definition of espionage to “all documents, data, materials or items related to national security and interests,” according to state-run media outlet Xinhua. But the legislation doesn’t specify what falls under national security, analysts noted, suggesting that could bring more risks to foreign companies and nationals in China.

Since March, Chinese authorities have raided the offices of consultancy Capvision, questioned employees at Bain, and detained staff from New York-based corporate intelligence firm Mintz and Japanese drug maker Astellas.

U.S. chipmaker Micron Technology recently warned of a “low-double-digit percentage” loss of its global revenue after being slapped with sanctions in China. China’s cybersecurity regulator in May said Micron failed its security review, without elaborating what risks it had found. That move means Micron’s products would be banned from Chinese companies operating critical infrastructure projects.

The closed office of the Mintz Group is seen in an office building in Beijing on March 24, 2023. Greg Baker/AFP via Getty Images

Craig Allen, president of the U.S.–China Business Council (USCBC), in a blog post, warned about the risk the new anti-espionage law could have on its members.

“The changes to the law are having a chilling effect on business sentiment, and confidence in China’s market will suffer further if the law is applied frequently and without a clear, narrow, and direct link to activities universally recognized as espionage,” Mr. Allen wrote.

“The revised law and recent cases indicate China’s heightened concern about multinational companies’ access to and use of data and information. As written, the law may be interpreted and enforced with an expansive view concerning the types of due diligence and similar customary business activities deemed illegal in China.”