Yellen arrives in China as US seeks to stabilise ties

On Friday, Yellen is scheduled to meet with Premier Li Qiang at the Great Hall of the People, speak with former vice premier Liu He, and attend a dinner hosted by former Chinese central bank governor Zhou Xiaochuan, a senior Treasury official told reporters on Thursday.

With Liu, her former counterpart, Yellen is expected to exchange views about the status of the two sides’ economies, as well as the global outlook, the official said, speaking on condition of anonymity.

Analysts are also watching closely for a potential meeting with Liu’s successor as vice premier, He Lifeng.

“The fact that she’s spending four days in Beijing, given all of her other domestic and international pressures, underscores the importance she is attaching to this visit,” Asia Society Policy Institute vice-president Wendy Cutler told AFP.

And while each side will have a long list of complaints to raise with the other with little flexibility to adjust their policies, the visit could allow Yellen to lay the groundwork for future collaboration, Cutler added.

REFRAMING RELATIONS

Yellen’s trip continues an effort by the United States to reframe US-China ties diplomatically and in other areas, said Lindsay Gorman, senior fellow at the German Marshall Fund of the United States.

“It’s about managing the new realm of strategic competition,” she said, noting that Yellen has pointed to competition only so far as it implicates security and values such as human rights.

With technology export controls and competitive measures “dominating the economic policy agenda now, I think there’s a real role to explain and communicate what the purpose of these measures really is”, she said.

Underscoring the challenges Yellen will face, The Wall Street Journal reported that the US administration is mulling restricting Chinese companies’ access to US cloud-computing services provided by companies such as Amazon and Microsoft.

Ahead of the trip, Beijing appears to have adopted reciprocal actions such as new export controls on metals key to semiconductor manufacturing, further proof that a shift in relations could take time.

But Yellen may be best positioned to build bridges with China on shared global challenges, Gorman said.

There are areas, such as debt distress, where cooperation appears more likely.

The United States has welcomed progress in the case of Zambia – whose creditors including China agreed to restructure its public debt – along with similar steps in Sri Lanka.