Markets Wired

SAN FRANCISCO – U.S. Secretary of the Treasury Janet L. Yellen met with People’s Republic of China Vice Premier He Lifeng in San Francisco, California on November 9-10. Secretary Yellen and Vice Premier He had candid, direct, and productive discussions on the U.S.-China bilateral economic relationship and a wide range of issues, including areas of cooperation and areas of disagreement. 

During the meetings, Secretary Yellen emphasized the importance that both countries responsibly manage the bilateral economic relationship, including maintaining resilient communication channels.

The two sides exchanged their views on domestic and global macroeconomic and financial developments. Secretary Yellen said that the U.S. and global economic outlooks remain resilient. At the same time, she acknowledged significant headwinds and risks to the global economy, including the need for Russia to end its illegal war against Ukraine and the importance of a just peace that respects Ukraine’s sovereignty, independence, and territorial integrity, as well as the need to prevent escalation and expansion of the conflict in the Middle East. The two sides also discussed developments in the Chinese economy.

Secretary Yellen emphasized that the United States seeks a healthy economic relationship with China that benefits both countries over time. She also stressed that healthy economic competition requires a rules-based level playing field, and raised concerns about the breadth and scale of China’s non-market policies and practices and their impact on U.S. workers and firms.

Secretary Yellen and Vice Premier He also discussed recent national security actions. Both countries exchanged information about their respective outbound investment regimes. The Secretary expressed concern about the PRC’s recent export controls on graphite and other critical minerals. She also stressed that companies must not provide material support for Russia’s defense industrial sector. Secretary Yellen underscored that U.S. national security actions in the economic sphere are predicated on clearly defined national security concerns, narrowly scoped, and transparently communicated. 

Secretary Yellen and Vice Premier He also agreed on important foundations for the U.S.-China economic relationship. Both sides:

• Agreed to intensify communication in order to work toward common solutions, address disagreements where possible, and avoid misperceptions contributing to unintended escalations. The Secretary and Vice Premier both welcomed the formation and initial meetings of the Economic and Financial Working Groups, which are led at the Vice Minister level and report to the two principals. The Secretary and Vice Premier committed to continued direct bilateral communication between them on a regular cadence.
  
• Emphasized that the U.S. and China are not seeking to decouple their economies. They welcomed the objective of a healthy economic relationship that provides a level playing field for companies and workers in both countries and benefits the two peoples.
  
• Committed to work together on shared challenges, including economic growth and financial stability and regulatory issues. They also committed to work together on climate change related economic issues and on debt issues in low-income and emerging economies. Both countries also committed to strengthening the international financial architecture. This includes a meaningful quota increase and steps to increase the voice of under-represented members/regions including through a new quota formula at the International Monetary Fund and the acceleration of efforts to evolve the Multilateral Development Banks to become better, bigger, and more effective.

Both sides agreed to keep close contact. Vice Premier He welcomes a return visit by Secretary Yellen to the People’s Republic of China, following her first visit as Treasury Secretary last July, and the Secretary looks forward to traveling there next year.

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