Treasury Secretary Janet Yellen testifies earlier than the House Financial Services Committee on Capitol Hill in Washington, D.C., on June 13, 2023. Yellen is touring to China amid tensions over a lot of points together with Taiwan.

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Treasury Secretary Janet Yellen testifies earlier than the House Financial Services Committee on Capitol Hill in Washington, D.C., on June 13, 2023. Yellen is touring to China amid tensions over a lot of points together with Taiwan.

Kevin Dietsch/Getty Images

Treasury Secretary Janet Yellen is on her method to Beijing for talks together with her Chinese counterparts at a a tense time for the 2 international locations, with tit-for-tat commerce restrictions and rising strategic frictions round Taiwan and the South China Sea.

Treasury officers say they do not anticipate any diplomatic breakthroughs from Yellen’s journey, which may also embody conferences with Chinese residents and U.S. enterprise leaders in Beijing. She’s on account of be in China from July 6 to July 9.

But the secretary hopes to forge stronger communications with China’s new financial leaders in an effort to keep away from an deeper souring of relations between the world’s two largest economies. Her go to — her first to China as Treasury Secretary — comes lower than three weeks after Secretary of State Antony Blinken visited Beijing.

This week, China introduced new limits on exports of key minerals utilized in making semiconductors and photo voltaic panels. The Chinese Commerce Ministry described the transfer as an effort to advertise nationwide safety.

It may be seen as retaliation for export limits the U.S. has directed at China. The Biden administration has restricted the sale of superior pc chips to China, and in keeping with The Wall Street Journal, it is contemplating limiting China’s entry to U.S.-based cloud computing providers.

Relations between the 2 international locations have additionally been strained by close calls between U.S. and Chinese warships and the flight of a Chinese spy balloon over the U.S.

Working with China

Within the administration, Yellen has adopted a much less confrontational method to China.

While she has defended efforts to maintain high-tech instruments out of the palms of the Chinese navy and domesticate backup provide strains in different international locations, Yellen insists the U.S. just isn’t attempting to sever financial ties with China altogether.

“A full separation of our economies would be disastrous for both countries,” Yellen mentioned in a speech in April. “It would be destabilizing for the rest of the world.”

Yellen and former Chinese vice-premier Liu He pose for an image forward of their assembly in Zurich on January 18, 2023. The relationship between China and the U.S. has soured over points together with frictions round Taiwan and the South China Sea.

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Yellen and former Chinese vice-premier Liu He pose for an image forward of their assembly in Zurich on January 18, 2023. The relationship between China and the U.S. has soured over points together with frictions round Taiwan and the South China Sea.

Sebastien Bozon/AFP through Getty Images

China is the third-largest buying and selling associate for the U.S., with almost $691 billion in items traded between the 2 international locations final 12 months.

That mentioned, Treasury officers insist that Yellen is not going to shrink back from elevating complaints about China’s human rights file or buying and selling practices that the U.S. sees as unfair.

“China and the United States can and need to find a way to live together and share in global prosperity,” Yellen mentioned in her April speech. “We can acknowledge our differences, defend our own interests, and compete fairly.”

Treasury officers say turnover within the high ranks of China’s financial management make this an opportune time to re-establish communication channels.

Yellen can be anticipated to debate potential cooperation between the U.S. and China on international challenges reminiscent of local weather change and the debt burden dealing with poor international locations.