Ahead of G20, Secretary Yellen Expresses Concerns Over China's Economic Practices

(Photo by EPA)

[Asia Economy Reporter Yujin Cho] At the G20 summit, U.S. Treasury Secretary Janet Yellen, who is scheduled to meet with the Governor of the People's Bank of China, emphasized stabilizing bilateral relations while expressing concerns about China's economic practices.

On the 12th (local time), Secretary Yellen, en route to Bali, Indonesia, where the G20 summit is being held, gave an interview to The New York Times (NYT) and said, "We recognize that we have comprehensive concerns about China," but added, "On the other hand, we will work to stabilize the relationship and establish a better foundation."

Secretary Yellen argued that the heightened tensions between the two countries stem from China's misunderstanding that "the U.S. is trying to hold back its own economy."

She said, "We understand their concerns about the U.S. policy banning exports of advanced semiconductors," but emphasized, "It is important to explain that this is not an attempt to completely paralyze the Chinese economy or halt its economic development."

She stated, "We are concerned about national security, but if our policies have unintended broad impacts on China, it is also important to listen to their concerns and respond accordingly." She added, "We are also concerned about their economic practices."

Secretary Yellen added that the meeting with the Governor of the People's Bank of China on the 14th will be an informal dialogue to discuss macroeconomic issues. Although she has held three video conferences with Liu He, China's Vice Premier in charge of economic affairs, this will be her first face-to-face meeting with a top Chinese official.

This meeting is scheduled on the same day as the first face-to-face meeting between U.S. President Joe Biden and Chinese President Xi Jinping. The U.S.-China relationship, which deteriorated significantly during the Trump administration due to tariffs and accusations over COVID-19 responsibility, has continued to worsen under the Biden administration, which has maintained a tough stance on China-related policies, including export controls aimed at curbing China's semiconductor industry.

Secretary Yellen has also shown a hostile stance toward China by urging it to pressure Russia to end the war of invasion in Ukraine and calling for strong economic sanctions against Russia.

Prior to departing for Indonesia, NYT reported that Secretary Yellen, in a speech at Microsoft's office near New Delhi, India, promoted the Biden administration's 'friendshoring' efforts (rebuilding supply chains centered on allies) and urged India and other allies to diversify supply chains away from China.

At this event, Secretary Yellen mentioned China's human rights issues and praised Apple for relocating part of its iPhone production facilities from China to India, as well as a U.S. solar company establishing a factory in India instead of China, according to NYT.