After a year marked by acrimony, Washington and Beijing are talking again. US Treasury Secretary Janet Yellen will travel to China for four days starting on July 6 to meet with senior government officials, her department said.
The test now is whether Yellen can nudge things into a new normal that avoids upending the global economy.
There has been an escalation in tensions after then-House Speaker Nancy Pelosi’s trip last year to Taiwan — which Beijing claims as part of China.
Yellen’s trip now comes as bubbling tensions over trade, technology and Taiwan threaten to torpedo the deep commercial and investment ties that have been the hallmark of the US-China relationship for decades.
Meanwhile, if already-tense relations further sour, the Wall Street Journal reported that US officials worry that China could cut off access to key goods such as components to electric-vehicle batteries vital to America’s car manufacturing industry.
According to Bloomberg, the US Treasury chief may face questions from her counterparts on the Biden administration’s plans to regulate and potentially cut off US corporate investment in China in sensitive technologies.
The Biden administration is reported to also be weighing additional restrictions on exporting semiconductors to China, a step designed to crimp Beijing’s ability to develop advanced artificial intelligence.
In Beijing, officials are criticizing the US technology controls as an attempt to hold back China’s economic development.
Meanwhile, anti-China rumblings still stemmed from Capitol Hill, underscoring deeper US tensions related to China’s currency policy, military muscle-flexing and its dismal human rights record vis-a-vis Tibetans and other groups.
While nominal trade between the two countries hit a record $690 billion last year, the share of US imports coming from China has been dropping, according to the WSJ.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
Follow her on Twitter: @UttaraProactive