Treasury Secretary Janet L. Yellen said on Tuesday that it would be a mistake for the United States to try to “decouple” from China and called for deepening economic ties between the world’s two largest economies.
The comments came as the Biden administration sought to improve relations with China, which faced a setback this year when a Chinese surveillance balloon was found flying over the United States. Secretary of State Antony J. Blinken is is planning a trip to Beijing next weekand Ms. Yellen hopes to make a trip there soon.
Speaking va Hearing of the House Committee on Financial Services on Tuesday, Ms. Yellen made it clear that she believes economic relations with China are critical.
“I think we gain, and China gains, from trade and investment being as open as possible, and it would be disastrous for us to try to separate from China,” Yellen said.
The United States is maintaining tariffs the Trump administration imposed on billions of dollars worth of Chinese imports, and the Biden administration is developing new restrictions on how American companies can invest in China. But Ms. Yellen said the United States only intended to “de-risk” the relationship and that it had no intention of causing economic harm to China.
“I certainly don’t think it’s in our interest to stifle the economic progress of the Chinese people,” Yellen said. “China has succeeded in lifting hundreds of millions of people out of poverty, and I think we should applaud that.”
Although she struck a welcoming tone, Ms. Yellen also expressed concerns that are likely to arise in meetings with her Chinese counterparts.
Because of national security concerns, she said, the administration is considering limiting investments by American private equity firms in Chinese firms with ties to the Chinese military. She also said the Treasury Department was examining additional sanctions against China in response to Uighur human rights abuses in Xinjiang.
In recent months, the United States has been increasing pressure on China to grant debt relief to Zambia and other developing countries. Ms. Yellen lamented that despite some signs of willingness to cooperate and help poor countries avoid default, China has not done enough. She highlighted the growing need for international financial institutions such as the World Bank and the International Monetary Fund to help the most vulnerable economies.
“These institutions reflect American values,” Ms. Yellen said. “It serves as an important counterweight to non-transparent, unsustainable borrowing from others like China.”
Asked about Ms. Yellen’s comments on Tuesday, Wang Wenbin, a spokesman for China’s foreign ministry, rejected the idea that the IMF or the World Bank were meant to support American interests.
“The IMF is not the IMF of the United States, or the World Bank for that matter,” he said.