To ‘Reestablish Contact’ in Economic and Trade Relations with China, the US Should Show Sincerity

Another senior U.S. official is coming to China. U.S. Treasury Secretary Janet Yellen is visiting from July 6 to July 9. The New York Times, Associated Press, the U.K.'s Guardian, Reuters and many other media outlets all promptly followed up on this. The close attention of the foreign media showed that the world is looking forward to an improvement in relations between the world's two largest economies. A healthy and stable China-U.S. relationship is in the common interest of both countries and is also the common desire of the international community. The U.S. should strengthen dialogue and cooperation in good faith and work to stabilize China-U.S. relations and bring them back on track.

This is Yellen's first visit to China as treasury secretary, and it is also the second visit to China by a member of the Biden cabinet after Secretary of State Antony Blinken. As early as January this year, U.S. media were speculating that Yellen would visit. Yellen herself has also made repeated positive statements about visiting China. Recently, a series of statements by Yellen on how to view the China-U.S. economic and trade relationship has signaled an easing of relations. In April, during a speech at Johns Hopkins University, Yellen said that to "decouple" the economies of China and the U.S. would be "disastrous." In June, during a hearing at the U.S. House of Representatives, Yellen once again said that U.S. attempts to "decouple" from China would be "disastrous" and a big mistake. She also said, "I certainly do not think it is in our interest to stifle the economic progress of the Chinese people. China has succeeded in lifting hundreds of millions of people out of poverty, and I think that's something we should applaud."

Based on the recent interactions between the U.S. and China, it remains to be seen to what extent these conciliatory statements will translate into action. In recent times, the U.S. has sent out somewhat contradictory messages about China-U.S. economic and trade relations. On the one hand, the U.S. leadership, including President Joe Biden and Secretary of State Blinken, has constantly emphasized that the U.S. does not seek to contain China and hopes to stabilize relations between the two. Yet, on the other hand, the U.S. has put more than 1,300 Chinese entities on various control and sanctions lists and implemented measures such as tariff increases, export control and investment reviews. It continues to wage a trade war, and industrial and technological battles are also being fought. Even the U.S. media are not fooled by the U.S. government's practice of saying one thing and doing another. The New York Times said in an article about Yellen's visit to China, "The Biden administration has [...] sought to limit China's access to semiconductors, biotechnology and sensitive technology that powers things like robotics, artificial intelligence capabilities and high-end computing."

Deutsche Welle recently quoted the words of Wendy Cutler, vice president of the Asia Society Policy Institute, a U.S. think tank, who said that China is "looking for concrete steps taken by the US to show that 'decoupling' and holding back China is not the ultimate goal of the United States." In this regard, the U.S. clearly has a lot it can do. For example, the U.S. government should cancel all the tariffs imposed on China as soon as possible. According to statistics, the current tariff on Chinese imports of U.S. goods is 7.1%, while the tariff on exports to the U.S. is 19.7%. Even with such an unequal situation, bilateral trade between China and the U.S. reached a historic high of over $690 billion in 2022. The facts have proved that the consequences of the U.S. government's abuse of tariff weapons have ultimately fallen on U.S. companies and consumers and to a certain extent have also contributed to the high inflation problems that are causing a headache for the White House and the Federal Reserve. Unfortunately, the U.S. government is still reluctant to relax this policy that harms others and itself. To create favorable conditions for businesses in both countries to expand commercial cooperation and reduce the trade deficit with China, the U.S. should lift the Section 301 tariffs it has imposed on China as soon as possible, relax export controls and stop trade restrictions on Chinese companies.

In a recent interview with MSNBC, Yellen said that she hopes "to reestablish contact" during her visit to China. If the U.S. genuinely wants to "reestablish contact," it should adopt a rational and pragmatic attitude, meet China halfway and uphold the consensus reached at the Bali meeting of the two presidents. It needs to translate positive statements into action, allowing the China-U.S. relationship to stabilize and improve.