The United States wants a good economic relationship with China, but it will still defend its national security, said Treasury Secretary Janet Yellen in a speech at Johns Hopkins University. Even though tensions are high between the two countries, Yellen said that the US is committed to defending its values and national security while seeking a fair economic relationship with China. Yellen also emphasized the importance of discussing difficult issues frankly and working together when possible. She added that healthy competition is only sustainable with fairness and the US will continue to partner with allies to respond to China’s unfair economic practices.
Yellen said that America’s national security actions are motivated solely by concerns about security and values and not aimed at stifling China’s economic or technological modernization. The US is considering restricting certain outbound investments involving sensitive technology with significant national security implications. However, Yellen said that the goal is not to gain a competitive economic advantage. She also pushed back against the idea that the US seeks to decouple its economy from China’s.
Yellen expressed concern over China’s no-limits partnership and support for Russia, which are worrisome indications that China is not serious about ending the war in Ukraine. She stressed that it is essential that China and others do not provide Russia with material support or assistance with sanctions evasion, warning of severe consequences.
Despite their disagreements, Yellen emphasized the need for cooperation on urgent global challenges. While both countries have agreed to boost communication on macroeconomic issues, along with cooperation on climate and debt distress, Yellen said more needs to be done. She called on China to follow through on its promise to work with the US on these issues, not as a favor but out of their joint duty and obligation to the world.
Yellen plans to travel to China at the appropriate time and hopes to engage in substantive dialogue with her new counterpart to lay the groundwork for responsibly managing their bilateral relationship. On recent banking sector turmoil, Yellen said the US will take any necessary steps to ensure the country continues to have the strongest and safest financial system in the world.
