Treasury Secretary Janet Yellen was expected Thursday to call for a “constructive” and “healthy” economic relationship between the U.S. and China.
That’s according to excerpts from prepared remarks she was set to deliver at Johns Hopkins University’s School of Advanced International Studies.
Yellen is expected to stress the need for “cooperation on the urgent global challenges of our day” while at the same time supporting economic restrictions on China to advance U.S. national security interests, such as clamping down on China’s semiconductor and computer chip manufacturing.
Already heightened U.S.-Chinese tensions were made worse in recent months after the Pentagon in February shot down a Chinese surveillance balloon over South Carolinian waters after it had crossed the continental U.S.
Tensions have also been aggravated by China’s saber-rattling against its self-governing neighbor, Taiwan. The U.S. has suspected for some time that China is planning to invade Taiwan, though it has been watching and waiting to see how Russia fairs in its invasion of Ukraine before going forth with an assault against the island nation that’s situated just one hundred miles off China’s coast.
The U.S., in the meantime, has beefed up its military presence in Taiwan.
Further adding to the tensions, U.S. intelligence from recently leaked classified Pentagon documents revealed that China approved a provision to give lethal aid to Russia for its war in Ukraine but wanted any shipments to remain a secret. That’s despite China having officially taken a neutral stance, and despite China’s Foreign Ministry saying on Friday it would not sell weapons to either side in the conflict.
China has also blasted the “Chips and Science Act” that was passed by Congress in July, saying restrictions on its technological development are unlawful and a blatant effort to try and weaken the Chinese economy.
Yellen, in her address, will seek to tamp down those concerns.
“These national security actions are not designed for us to gain a competitive economic advantage, or stifle China’s economic and technological modernization,” her prepared remarks say. “Even though these policies may have economic impacts, they are driven by straightforward national security considerations.”
Further, she’s set to say that both the U.S. and China can benefit from “healthy competition in the economic sphere”—when that competition is “fair.”
“A growing China that plays by international rules is good for the United States and the world,” Yellen’s remarks say.
Yellen will also note that the economic output of the United States remains far larger than China’s.
