News Update


Has Janet Yellen’s trip to Beijing made things better between the US and China?

US Treasury Secretary Janet Yellen just got back from a four-day trip to China. The goal of the trip was to improve relations between the US and China.

Was going to Beijing a good idea? Well, by one simple measure, yes.

The US and China are talking to each other again, this time face-to-face and with politeness and respect, if not warmth.

It’s a big change from when Donald Trump was president and most of the contact across the Pacific was done through social media.

On both sides, the tone and content are more upbeat and balanced.

Ms. Yellen said that her trip would help build a “resilient and productive channel of communication with China’s new economic team.” That shouldn’t be written off.

In March of this year, most of the top level of China’s government was changed with men whose main quality is loyalty to leader Xi Jinping. He Lifeng, the new head of the country’s economy, is one of the most important.

Janet Yellen spent a lot of time with Mr. He on Saturday. She said that their talks had been “direct, substantive, and productive,” but she also said that there were “significant disagreements” between the two sides.

During her visit, Ms. Yellen tried to convince her Chinese hosts that, under President Joe Biden, the United States is not basically against China.

She said, “We don’t see our relationship as a big power war, and we don’t want to separate our economies from each other.”

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It looks like the Biden administration is trying to show that its policy toward China is not just a continuation of Trump’s open animosity toward Beijing.

Did she make it?

We are still waiting for the Chinese to say something.

But deeds speak louder than words, as the saying goes. And from Beijing’s point of view, some of the things the Biden government has done recently are far from friendly.

One of the most important of these is putting restrictions on the sale of certain US microchips that are used to make AI.

Far from being eased, the US is now working to expand these restrictions to include other high-tech exports to China. It is also putting a lot of pressure on its friends, such as Japan, Germany, and the Netherlands, not to give China the tools it needs to make the most advanced microchips.

America’s goal is simple: it doesn’t want China to have easy access to American technologies that could give it an edge in things like artificial intelligence (AI) and military technologies that could be used against the US in a future war over, say, Taiwan.

All of this means that even though the lines of communication have been reopened and seem likely to speed up in the coming months, the process is still delicate.

Progress made in the last few days could easily be set back by another “spy balloon” incident or a close call between US and Chinese naval ships or planes.

Even the most optimistic experts agree that this relationship is now very tough and will need careful, long-term management from both sides to stay stable.


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