Treasury Secretary to talk finance with officials in Beijing

Treasury Secretary Janet Yellen will meet later this week with her Chinese counterparts to talk about major financial issues, making her the second top White House official to travel to the US’ great rival in a matter of weeks.

Yellen’s Thursday-Sunday visit is meant to address “areas of concern” in the relationship between the world’s two largest economies as part of President Biden’s government-wide effort to re-engage with China and its president, Xi Jinping, the Treasury Department announced over the weekend.

The visit of Yellen, 76, will hopefully “deepen and increase the frequency of communication between our countries moving forward and to stabilize the relationship, avoid miscommunication, and expand collaboration where we can,” a senior administration official told CNBC.

“We do not seek to decouple our economies, a full cessation of trade and investment would be destabilizing for both of our countries and the global economy,” the official added.

Yellen’s visit comes approximately three weeks after Secretary of State Antony Blinken traveled to Beijing to thaw diplomatic tensions between the two powers.

During that visit, Xi rebuffed a request to re-establish military-to-military back-channel communications between the US and China.

“I think it’s absolutely vital that we have these kind of communications,” the secretary of state told reporters during a June 19 press conference in Beijing. “I think that’s an issue that we have to keep working on. It is very important that we restore those channels.”

The State Department also said Blinken “underscored the importance of responsibly managing the competition between the United States and the [People’s Republic of China] through open channels of communication to ensure competition does not veer into conflict.”

The Chinese government cut off the hotline to protest a trip former House Speaker Nancy Pelosi (D-Calif.) made to Taiwan in August.

Blinken was the highest-level US official to go to China since the 80-year-old Biden’s inauguration and the first secretary of state to visit since Mike Pompeo in 2018.

In April, Yellen said in a speech that the US had “three principal objectives” in terms of economic policy toward China.

“First, we will secure our national security interests and those of our allies and partners, and we will protect human rights. We will clearly communicate to the PRC our concerns about its behavior. And we will not hesitate to defend our vital interests,” she said. “…Second, we seek a healthy economic relationship with China: one that fosters growth and innovation in both countries. A growing China that plays by international rules is good for the United States and the world. Both countries can benefit from healthy competition in the economic sphere. But healthy economic competition – where both sides benefit – is only sustainable if that competition is fair.”

“Third, we seek cooperation on the urgent global challenges of our day,” Yellen added. “Since last year’s meeting between Presidents Biden and Xi, both countries have agreed to enhance communication around the macroeconomy and cooperation on issues like climate and debt distress. But more needs to be done.”