Why visit China at this time?, She is in charge of the United States' money bag, the Treasury Department | Question | United States

Author: Xu Ye Li Zhengming

According to the agreement between China and the United States, US Treasury Secretary Janet Yellen will visit China from July 6th to 9th.

This is Yellen's first visit to China as finance minister.

"In American politics, the Secretary of the Treasury is a lifeline type cabinet official. However, the Biden administration marginalized the Treasury and it took two and a half years for Yellen to participate in handling the US China economic relationship, which is a very rare phenomenon."

"Yellen's visit to China is a positive trend now. In the practical field, both sides are more likely to discover common interests and demands," said Lv Xiang, an expert on American issues at the Chinese Academy of Social Sciences, to Global People

The marginalized "stabilizer"

People who follow the American financial circle should not be unfamiliar with Yellen.

Her resume is quite impressive:

PhD in Economics from Yale University, previously taught at Harvard University, and is a tenured professor at the University of California, Berkeley;

My husband is a Nobel laureate in economics, and my son is an economics professor. When our family goes on vacation by the beach, they all sit on the beach reading and writing;

Appointed by Clinton as the Chairman of the Council of Economic Advisers, then appointed by Obama as the Chairman of the Federal Reserve, and later became Biden's Secretary of the Treasury, she was the first "Grand Slam" woman to sit in these three high-ranking financial positions.

·Yellen is giving lectures at university.

In the eyes of the outside world, Yellen is a pragmatic and calm person.

She studied under the renowned scholar Tobin. Tobin advocated that economics should "focus on people in reality," and Yellen later repeatedly stated that economics is not cold and cannot only please Wall Street, but should also care about the suffering of ordinary people.

This perception is related to her upbringing experience - her father Julius was a doctor and during the Great Depression, he provided free medical treatment to patients who were unemployed and had no money. At that time, Yellen began to understand the impact of unemployment on ordinary people.

In Yellen's view, economics is a discipline closely related to human well-being that uses rigorous and analytical methods to think about matters that have a significant impact on people's lives.

In 2014, Yellen became the first woman to lead the Federal Reserve and also the first woman to lead a major central bank in the world. During her years at the helm of the Federal Reserve, the employment rate and wages in the United States both increased, while maintaining low interest rates.

·Yellen data chart.

Last April, as the US Treasury Secretary, Yellen publicly stated that lifting tariffs on certain Chinese goods imported to the US could help alleviate high inflation across the country.

"Yellen is a senior fiscal official and macroeconomist, but unfortunately, her relatively rational and professional voice has been marginalized in this US government. US decision-makers did not listen to her views, and since the second half of last year, inflation in the United States has become uncontrollable," said Lu Xiang.

The two heads of state agreed to maintain strategic communication and conduct regular consultations between their diplomatic teams. Agree to engage in dialogue and coordination between the financial and economic teams of the two countries on macroeconomic policies, economic and trade issues.

"The two heads of state reached such a consensus at that time. However, due to various reasons, especially the US hype about the so-called 'balloon event' in February this year, Sino US relations were strained and did not move forward in a timely manner in accordance with the consensus." Lv Xiang believes that US Secretary of State Antony Blinken's visit to China recently finally took the first step, and Yellen's visit is more noteworthy.

"Since the normalization of Sino US relations, even during the 'chaotic period' of the Trump administration, the US Treasury has played a stabilizing role in Sino US relations. In the Biden administration, Yellen was not a direct descendant of Biden and was marginalized in national security and diplomatic decision-making. Now that we enter the stage of Sino US diplomacy, we can expect the US Treasury to play a stabilizing role again."

"There are four most important issues."

What are Yellen's plans to discuss during his visit to China?

Lv Xiang believes that the most important issues can be roughly divided into four aspects:

The first is macroeconomic coordination, which mainly involves the monetary and fiscal policies of the United States, in other words, the debt problem of the United States.

In early June, Biden signed a bill on the federal government's debt ceiling and budget, marking the 103rd time Congress has adjusted the debt ceiling since the end of World War II.

At present, the size of the US federal debt is approximately $31.46 trillion, accounting for over 120% of its gross domestic product, equivalent to $94000 in debt per American.

The debt problem of the United States is too burdensome to return. In recent years, some countries and institutions have begun to reduce their holdings of US dollar assets such as US bonds, and reduce the risk of excessive reliance on US bonds through diversified investment layouts. Of course, the United States cannot sit still.

"The US debt issue may be the most important issue in Yellen's mind, but it is not the most important issue for China."

·Yellen data chart.

The second is to discuss the issue of bilateral trade and investment relations.

The Trump administration has imposed restrictions on China's trade, while the Biden administration has also begun to impose restrictions on China's investment, and has recently even hinted at imposing restrictions on a wider range of areas. But in fact, on this issue, it is not impossible to talk between China and the United States.

"In fact, imposing tariffs on Chinese products imported to the United States is equivalent to an additional consumption tax on American consumers, and the harm to American consumers' interests is enormous." Lv Xiang said, "It is worth observing whether Yellen takes proactive stop loss measures on tariff issues as the primary option."

The third issue is regulatory issues in the field of technology.

The United States continues to expand its control list, abusing export control tools such as physical lists to contain and suppress Chinese enterprises. China has also taken necessary countermeasures. So, where exactly will China and the United States go in the field of technology?

"It's not that without the United States, Chinese companies cannot survive, but rather whether China and the United States will prioritize cooperation or confrontation in the field of technology in the future will become a major issue. If an unbridgeable gap is formed between the two sides in the field of technology, the impact on the world will be huge - countries around the world will face a conflicting choice of 'China or the United States' in key technology areas in the future. I don't expect Yellen's visit to China to solve the problem, but I hope the US can send a positive signal to the world."

The fourth topic to discuss is global issues, such as climate change.

"In terms of climate change, there is consensus among countries around the world, but there are also significant differences in specific areas. To solve climate issues, we cannot rely on shouting slogans, but ultimately need to implement specific green energy technologies and products. Therefore, both sides need to discuss and clarify specific issues."

Lv Xiang said that these issues are not something that Yellen, as the Minister of Finance, can understand, but the Minister of Finance is a very crucial role.

"This is an appropriate time to visit China"

Many analysts are not optimistic about the substantial effects that Yellen's visit to China can bring.

The Biden administration has previously implemented strict restrictive measures, restricting Chinese technology companies from purchasing American technology and products, and lobbying allies to follow suit; On June 30th, under pressure from the US, the Netherlands announced further restrictions on the sale of high-end chip manufacturing equipment to China; On July 4th, American media reported that the US government may restrict Chinese companies from using US cloud computing services.

Even when announcing Yellen's visit to China, the US Treasury Department mentioned in a statement that Yellen gave a speech in April this year, reiterating the so-called "three principles" of US economic relations with China:

Seeking to ensure the national security interests of the United States and its allies; Seeking to establish healthy economic relations with China and expanding economic opportunities for American workers and businesses; Seeking cooperation with China on urgent global challenges such as climate change and debt distress.

It can be seen that Yellen's top priority is still seeking to ensure the national security interests of the United States and its allies.

·Yellen data chart.

Antony Blinken, who has visited China for more than half a month, said in an interview a few days ago that the United States will continue to do something that China does not like and say something that China does not like.

On July 3rd, former Chinese Ambassador to the United States, Cui Tiankai, stated at the World Peace Forum that the recent high-level exchanges between China and the United States are good things. It is better for both sides to meet and sit down to discuss than not meeting or discussing.

He also said that China has never expected the United States to like what it says or does, and China has never promised to say what the United States likes to hear or do what the United States likes to see. China and the United States need to find ways to handle their relationship with mutual respect, truly achieving peaceful coexistence and win-win cooperation on the basis of mutual respect.

In Lv Xiang's view, no matter what, Yellen's visit to China is a positive factor for China US relations to emerge from a low point. No matter what kind of strategic contradictions there may be between the two sides, as long as both sides engage in practical consultations, they can still discover some common interests, which will have a positive impact on the stability of their relationship.

"The timing of Yellen's visit to China is also quite appropriate. There is still some time left for the window to improve relations between China and the United States, but this time is not particularly long. Once the United States truly enters the next election cycle, it will be chaotic, and both the President and other high-ranking officials will have no intention of working hard for Sino US relations. Therefore, for Sino US relations, now is a critical period," said Lv Xiang.