Janet Yellen, Remarks after Beijing economic meetings, July 8, 2023

As Prepared for Delivery

Thanks for being here today.

The relationship between the United States and the People’s Republic of China is one of the most consequential of our time. As the world’s two largest economies, our nations collectively represent 40 percent of the global economy. What we do – both in the bilateral sphere as well as on the broader global stage – shapes the lives and livelihoods of the people in our countries and beyond.

I have been intent on speaking about this relationship plainly and honestly: to address the challenges and opportunities that face us based on sober realities. The U.S. and China have significant disagreements. Those disagreements need to be communicated clearly and directly. But President Biden and I do not see the relationship between the U.S. and China through the frame of great power conflict. We believe that the world is big enough for both of our countries to thrive. Both nations have an obligation to responsibly manage this relationship: to find a way to live together and share in global prosperity.

Like Secretary Blinken, I came to Beijing to deliver on President Biden’s directive to deepen bilateral communications after his meeting with President Xi last November. My objective during this trip has been to establish and deepen relationships with the new economic leadership team in place in Beijing. Our discussions are part of a broader concerted effort to stabilize the relationship, reduce the risk of misunderstanding, and discuss areas of cooperation.

Over the past two days, I have had the chance to do just that. I’ve met with Premier Li, Vice Premier He, Finance Minister Liu, People’s Bank of China Head Pan, and other senior officials to discuss important pillars of our economic relationship. These conversations were direct, substantive, and productive. We were able to learn more about each other’s economies and policy choices, which I believe is vital as the world’s two largest economies. Even where we don’t see eye-to-eye, I believe there is clear value in the frank and in-depth discussions we had on the opportunities and challenges in our relationship, and the better understanding it gave us of each country’s actions and intentions. Broadly speaking, I believe that my bilateral meetings – which totaled about 10 hours over two days – served as a step forward in our effort to put the U.S.-China relationship on surer footing.

Let me touch upon a few of our discussions in greater detail.

First, I communicated that President Biden and I seek a future of healthy economic competition between our countries. We believe it is possible to achieve an economic relationship that is mutually beneficial in the long term – one that supports growth and innovation on both sides. Indeed, I noted that China’s growth has lifted hundreds of millions out of poverty and made clear that the United States is not seeking to decouple from China. There is an important distinction between decoupling, on the one hand, and on the other hand, diversifying critical supply chains or taking targeted national security actions. We know that a decoupling of the world’s two largest economies would be disastrous for both countries and destabilizing for the world. And it would be virtually impossible to undertake. We want a dynamic and healthy global economy that is open, free, and fair – not one that is fragmented or forces countries to take sides.

I also communicated to my counterparts that healthy economic competition is only sustainable if it benefits both sides. I pressed them on our serious concerns about China’s unfair economic practices. That includes the breadth and depth of China’s non-market policies, along with barriers to market access for foreign firms and issues involving intellectual property. Fair treatment is critical so American firms and workers compete on a level playing field – and benefit economically from trade and investment with China and the huge market it presents for American goods and services. I also expressed my worries about a recent uptick in coercive actions against American firms.

Importantly, I believe that a shift toward a more market-oriented system in China would not only be in the interests of the U.S. and other countries. It would be better for the Chinese economy as well. During this trip, I met with U.S. business leaders who said they would like to see greater economic engagement with China. I also know that many businesses have expressed a range of concerns on the challenges that foreign firms can face here. It is important that we work together to make sure businesses understand there is a wide swath of economic interactions that are uncontroversial to both sides.

Second, we also spoke about national security and human rights. I emphasized to my counterparts the necessity of clear and direct communication on the actions we are taking – and why we are taking them. Senior-level engagement is particularly vital during moments of tension. The U.S. will continue to take targeted actions that are necessary to protect our national security interests and those of our allies. As we do so, we adhere to a set of important principles like making sure our national security actions are transparent, narrowly scoped, and targeted to clear objectives. Importantly, these actions are motivated by straightforward national security considerations. They are not used by us to gain economic advantage.

I also raised the importance of ending Russia’s brutal and illegal war against Ukraine. As we continue to monitor the domestic situation in Russia, U.S. support for Ukraine will not change. And I communicated that it is essential that Chinese firms avoid providing Russia with material support or assistance with sanctions evasion.

Third, we discussed areas where we can work together on global challenges – from tackling the climate crisis to addressing sovereign debt sustainability. This is not a bilateral issue between China and the United States. It is about responsible global leadership. The world deserves and expects its two largest economies to work together on these global problems and help find solutions.

We exchanged views on macroeconomic and financial developments in both of our countries. And we shared a common understanding that sustained engagement on these issues was important to maintaining global financial stability. On debt distress in developing countries and emerging markets, we welcomed recent progress on individual cases such as Zambia. I reiterated the importance of timely and comprehensive participation by all bilateral official creditors in other urgent cases. Our Administration believes that improving the debt restructuring process is crucial for the world economy. In addition, we believe that China, as the world’s largest bilateral creditor, can gain from the greater certainty provided by those improvements. We also spoke about the opportunity to work together to mobilize private financing for climate action. And I was able to meet with a group of climate finance leaders in Beijing at a roundtable event. The U.S. Treasury and the People’s Bank of China co-chair the G20 Sustainable Finance Working Group, a concrete example of our ability to work together and lead on global challenges. We also spoke about important efforts to modernize our international development finance system.

No one visit will solve our challenges overnight. But I expect that this trip will help build a resilient and productive channel of communication with China’s new economic team. Over the past two years, there has been significant public coverage of meetings between our two sides, including my and Secretary Blinken’s visits to China. My hope is that we can move to a phase in our relationship where senior-level diplomacy is simply taken as a natural element of managing one of the world’s most consequential bilateral relationships.

Let me end by saying this: navigating the contours of the relationship between the United States and China is no easy task. But we must never forget that, despite the challenges, our path is not predestined. During this trip, I had the opportunity to meet with a group of Chinese women economists. These economists grew up an ocean away from America, but they share much in common with the American economists I’ve worked with throughout my career: a desire to do good work and secure a better future for themselves, their families, and the world. Ultimately, what road we go down in our bilateral relationship is a choice that both countries make. I believe that our two countries must make the right choice for our people and the world: one that advances our shared interest for peace and prosperity.

With that, I will take your questions.