Yellen told Beijing, US control on investment will not harm China

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US controls on investment in China will only target sensitive national security areas, Janet Yellen has told her counterparts in Beijing during a four-day visit that aims to “level” their troubled ties.

Speaking at a news conference on the final day of his trip, which included meetings with Premier Li Keqiang and his counterpart He Lifeng, the US Treasury Secretary said he was worried about the damage to China’s economy from a possible national security crackdown. Wanted to remove the worries.

Throughout her visit, Yellen spoke of the prospects for ongoing trade and economic cooperation between the US and China, highlighting Washington’s desire to stabilize the relationship, even if it made it more difficult for China to obtain US technology. .

The Biden administration is now considering a mechanism to reduce the risk of US investments helping China’s military. “I emphasized that (investment screening) would be highly targeted and clearly focused on certain areas where we have specific national security concerns,” Yellen said.

During her visit, Yellen reiterated that it is important to have a high level of engagement between Washington and Beijing, despite security concerns.

Yellen said, “Even where we don’t meet face-to-face, I believe there is clear value in frank and in-depth discussion.”

Yellen said she has raised concerns with her counterparts on everything from security and human rights to “increased punitive actions against American companies.”

“I also raised the importance of ending Russia’s brutal and illegal war against Ukraine,” he said in remarks shortly before his departure from Beijing. “I pointed out that it is essential that Chinese companies refrain from providing material support or assistance to Russia to avoid sanctions.”

His visit comes at a time when China is grappling with a tremendous economic recovery after lifting the Covid controls. While China is targeting five per cent growth this year, economists fear some underlying growth engines such as the property sector are entering a prolonged recession.

This has helped the government to seek more foreign investment. But tensions with the US have hurt sentiment, with businesses worried about being caught in tit-for-tat trade sanctions and increasingly tight national security measures.

China’s state media generally gave slow coverage of Yellen’s visit. Xinhua news agency described the talks as “constructive” and “pragmatic”, but said Beijing believed that “normalising” national security issues was “not conducive to normal economic and trade exchanges”.

The nationalist Global Times quoted China’s second-ranking official, Premier Li Qiang, as telling Yellen that “after a period of ‘wind and rain’ in Sino-US relations, there could be a ‘rainbow’.”

Dennis Wilder, a former top CIA China specialist who is now at Georgetown University, said Chinese leaders “clearly view Secretary Yellen as one of the more pragmatic, and less political, senior officials in the Biden administration”. .

Wilder added, “They also assess that historically economic and trade ties have played an important role in US-China relations, stabilizing the relationship even when issues such as Taiwan or the Tiananmen Action have vitiated the relationship.” Has been done.” “After all, overall US-China bilateral trade is reaching new highs, even as the overall relationship has hit new lows.”