Yellen says US will listen to China concerns

She added on Sunday that she agreed that Washington would listen to Chinese concerns about security-related curbs on US technology exports and might respond to unintended consequences as she ended a visit to Beijing aimed at reviving strained relations. Yellen defended targeted trade measures that China's leaders claim are aimed at hurting its fledgling tech industries. The Biden administration said it wants to avoid unnecessary repercussions but didn't give any indication of possible changes. The tensions between the two biggest economies have remained at their lowest level in recent years due to disputes over technology, security, and other irritants. A key Chinese complaint is that on security grounds, access to processor chips and other American technology is limited on security grounds, which could adversely impact the ruling Communist Party's ability to develop smartphones, artificial intelligence and other industries. We will open up channels so that they can express concerns about our actions, and we can explain and possibly respond to unintended consequences of our actions, Yellen said at a news conference. Prime Minister Li Qiang, two leaders, and other officials are among those who participated in 10 hours of talks. She and her Chinese counterpart, Vice Premier He Lifeng, have a five-hour session on Saturday. In advance of her meeting, the Treasury officials said there were no plans for her to meet Chinese leader Xi Jinping Yellen, who received a warm welcome and prominent coverage by the state press, but Chinese officials did not give any sign they would change industrial or other policies that Washington and other governments say violate Beijing's free-trade commitments. On Saturday, he urged Washington to adopt a rational and pragmatic attitude to improve relations. On Sunday, Yellen said no agreements on major disputes or plans for future activity had been reached but said that her department and Chinese officials would have more frequent and regular communication. The political instability in the US and China is hindering the willingness of consumers and businesses to spend and invest. China's economy rebounded to 4.5 percent in the first quarter of 2023, from 3 per cent in last year. In June, factory activity and consumer spending decelerated, the report said. In March, Xi accused Washington of trying to hold back China's industrial development. Beijing has been a slow responder to US technology restrictions, possibly to avoid disrupting its own industries. Three days before Yellen's arrival, the government declared unspecified controls on exports of gallium and germanium, metals used in making semiconductors and solar panels. Yellen said she tried toreassure officials that Washington doesn't want to decouple or separate its economy from China, while it tries to de-risk trade. The government is demanding that semiconductor makers move manufacturing to the United States to decrease reliance on Taiwan and other Asian suppliers, which is seen as a security risk. Washington wants to develop alternatives to Chinese supply of rare earth elements, metals used in smartphones, wind turbines and other products. They had expressed some concerns that de-risking amounts to decoupling, Yellen said. She said she tried toreassure Chinese counterparts that this is by no means the same thing. The de-risking involves attention to clearly articulated and narrowly targeted national security concerns, and broader concern with diversifying our supply chains, which the United States is doing in a few important sectors, she said. Throughout her visit, Yellen sought for healthy economic competition, a reference to concerns that Beijing violates its free-trade commitments by subsidizing and shielding politically prefered industries from private and foreign competition. Yellen said she was concerned by Chinese officials' coercive activities against US companies. It follows raids on consultancy firms and the detention of staff members without explanation and what the US government said is arbitrary detention or restrictions on people leaving China that some complain are used to pressure them in business disputes. China's leaders are trying to revive investor interest, but foreign firms are uneasy about their standing after Xi and other officials called for economic self-reliance. The ruling party has enlarged a anti-spying law that has created uncertainty about what law firms or consultants can do. On Saturday, Yellen urged U.S. President Donald Trump for cooperation on climate change, the debt burdens of developing nations and other global challenges. She said her governments should not let disagreements about trade and security derail economic and financial relations. Last August, Beijing retaliated for a visit by then-Speaker Nancy Pelosi of the House of Representatives to Taiwan, the self-ruled island democracy claimed by China as part of its territory. John Kerry, President Joe Biden's climate envoy, is due to become the next senior official to visit China next week. The world's top emitters of climate change are China and the United States. China signed an agreement last month to restructure Zambia's debt, with billions of dollars lent under Beijing's Belt and Road Initiative to build ports and other infrastructure across Asia and Africa. Treasury officials pointed out that cooperation was a successful effort.