Managing “shocks” will be a pivotal part of maintaining stability in the US relationship with China, Treasury Secretary Janet Yellen said on Thursday.
During her speech at the US-China Business Council’s 50th Anniversary Dinner in Washington, Ms Yellen outlined priorities of President Joe Biden's administration to manage economic relations between the two superpowers next year.
“We know that this relationship will face continued challenges,” Ms Yellen said in her remarks.
“There is also always the risk of shocks that impact both of our countries. We seek not to resolve all our disagreements nor avoid all shocks.”
Ms Yellen said improved communication between the two countries can prevent misunderstandings from escalations when these shocks do occur.
The former Fed chairwoman has made rehabilitating communication between Washington and Beijing a key priority this past year by visiting China for the first time as Treasury Secretary, engaging in talks with China's Vice Premier on the sidelines of the Apec summit in San Francisco and establishing a working group between the two countries.
She has highlighted several global challenges – such as climate change, countering terrorism financing and halting the flow of fentanyl – as opportunities for Washington and Beijing to co-operate.
But in her remarks, Ms Yellen also reiterated that the US will continue pressing China with investment restrictions in the interests of national security and human rights.
Ms Yellen said she will also urge China to provide greater transparency with regard to its economic priorities.
She hopes to visit China again in 2024 to “discuss difficult areas of concern” with Vice Premier He Lifeng.
Biden administration has 'course corrected' from Trump
Her speech also took a rare shot at former president Donald Trump, alleging his administration left the US “more vulnerable and more isolated in a competitive global economy”.
“Over the past three years, the Biden administration has course-corrected,” she said.
Ms Yellen has said Mr Trump's isolationist policy – which the former president called “America First” – was ill conceived in an increasingly global economy.
Mr Trump's economic policy also focused on protectionist trade policies and attempts at cutting policies from the Barack Obama administration that Ms Yellen said had done far more harm than good.
“It damaged our global standing and meant significant missed economic opportunities for American firms and workers,” she said.
The Treasury Secretary believes the Biden administration has taken steps to make up gains through its domestic policy agenda and by redeveloping relations with other countries, particularly in the Indo-Pacific region.
Greater economic integration in the region can benefit US economic security, create stronger supply chains and boost US resilience, she said.
“As I’ve said before, America’s fundamental economic strength means that we have nothing to fear from healthy economic competition, with China or any other country.”
