Treasury Secretary Janet Yellen spent days in Beijing with Chinese leaders. In contrast to an icy June visit by Secretary of State Antony Blinken, this meeting supposedly went well.
Progress in China
The Wall Street Journal reports Janet Yellen Hails Progress in Stabilizing Rocky U.S.-China Ties
Treasury Secretary Janet Yellen hailed progress in stabilizing ties between the U.S. and China, as she concluded a trip that marked an improvement in tone for a relationship that has deteriorated to near historic lows in recent months. Yellen emphasized that the U.S.’s growing national-security restrictions on doing business with China—a top concern for Beijing and Chinese companies—were intended to be narrowly focused.
“I want to allay their fears that we would do something that would have broad-based impacts on the Chinese economy,” she said at a news conference. “That’s not the intention.”
“This is a time for the United States to be showing strength, not this slow surrender that I see from this administration,” Sen. John Barrasso (R., Wyo.), a member of the Senate Foreign Relations Committee said Sunday on Fox News.
Relations plummeted in February after a suspected Chinese spy balloon drifted across the U.S. on the eve of a similar planned visit to Beijing by Secretary of State Antony Blinken. The Biden administration abruptly canceled the trip—and shot down the balloon with an F-22 Raptor jet fighter in a show of American force. When Blinken’s postponed trip to China finally went ahead in June, the U.S. secretary of state received a lecture from Beijing’s top diplomat, Wang Yi. China’s readout of the meeting said the U.S. was squarely to blame for tensions between the countries.
“Wang demanded that the United States stop playing up the so-called ‘China threat,’ lift illegal unilateral sanctions against China, stop suppressing China’s scientific and technological advances, and not wantonly interfere in China’s internal affairs,” the readout said.
In contrast, when meeting Yellen at the Great Hall of the People on Friday, Premier Li Qiang gushed about rainbows arching over U.S.-China relations. “It’s not all wind and rain,” Li said. “After the wind and rain, once that passes, we’ll definitely see more rainbows.”
Yellen has faced substantial skepticism during her visit. Part of that stemmed from a widely held belief in Beijing that the U.S. is seeking to decouple its economy from China’s, an assertion she rejects.
Smiling Faces Hide Mutual Skepticism
China fears the U.S. is seeking to decouple its economy from China.
Let’s be honest. Biden is attempting just that.
And let’s be equally honest, China would just assume do the same while stealing US technology to do so, then exporting the rest.
Right or wrong, China spots an easier target in Treasury Secretary Yellen than Secretary of State Blinken. Then again, perhaps this whole thing with Blinken and Yellen was a dog and pony show carefully scripted by China to show progress when progress is scant.
What’s Changed?
- Is the US going to send advanced microchips to China?
- Is the US or EU going to lift restrictions on Huawei’s 5G technology even as the EU falls in line with Biden’s demand to restrict China?
- Has the US position on Taiwan changed?
- Is China going to rewind its export curbs on gallium and germanium?
Nothing of substance has changed other than we now have smiling faces and talk of rainbows instead of lectures and threats. I happen to have a musical tribute.
Sunshine, Lollipops, and Rainbows
A Game No One Can Win
Meanwhile back in the real world, please consider A Game No One Can Win: China Retaliates Against Biden’s Chip War.
“And let’s be equally honest, China would just assume do the same while stealing US technology to do so, then exporting the rest.”
Yes, China steals IP. But we continue to do business with China because it’s so lucrative. It’s a benefit/cost calculation. Loss of IP is just a cost of doing business.
I do wonder if the whole “they are stealing our proprietary technology!” is a fig leaf. Censuring China helps us avoid looking in the mirror. Isn’t the biggest fear about China that it is squeezing out private profit as the next phase of staying competitive, now that its wage rates have increased?
In search of leverage and profit, Wall Street will simply move manufacturing to other low wage countries, not return those jobs to the U.S. But we have to engage in China-bashing because that’s the political theatre that works for our leaders. We are always bashing, not learning or listening.
Australia has also been in thawing relations with China lately.
I suspect the US has more to lose in any rift than the Chinese. They make the stuff, we consume it. As China’s lead in 5G technology shows, they are no longer that dependent on us for technology. That horse has left the barn. Chinese make good engineers and some of the best and brightest in the US are Chinese.
I’m sure Biden’s move on semiconductors is accelerate China’s development of the necessary downstream technology that is used in semiconductor manufacturing.
China is way behind in top end semiconductor manufacturing. It will take decades for them to catch up. But, they don’t need the US to catch up. Taiwan makes the best chips and the Netherlands makes the equipment to make them.
China can come very close to catching up in pure mechanical manufacturing much quicker than that.
One thing US based organizations have, is substantially more advanced chip design teams. It’s one thing to cram a lot of circuits on a chip. To get the most out of all that, you also need to make good use of the logic.
Conceptually simpler chips, like memory and even GPU, are largely about parallel scale. But for problems which does not so easily paralelnize (CPU problems….), US organisations are still well ahead of the rest wrt chip design.
And since solutions to those problems can only come about as a result of encountering the problems then banging away trying to solve them effectively one-by-one, it’s the sort of knowledge that’s harder to speed up: Designers at Intel, simply would have no idea how to make use of ever more logic circuits every year, other than based on feedback wrt what was lacking from users of existing circuits. IOW: It’s not just about enough smart guys in a lab.
It simply takes time, and large numbers of users running into real world problems which can then be solved. With the “whole world” by now living and working in CPU ecosystems built on top of US CPUs, it’s a tough problem for even the best of Chinese chip designers to crack.
For purely military purposes, there is likely areas which are so distinct from general computing that the above does not necessarily apply. But it’s still unlikely that all the learnings derived from running pretty much every “normal” workload on the planet, does not also provide hints wrt what works and not, for such possible cornercase workloads as well.
So I doubt the US will lose it’s overall advanced chip lead to China anytime soon. A different issue is that state-of-the-art chips may, by now, be so far out on the diminishing returns scale, that even a technically 80% “worse” chip (say, something which was state-of-the-art 8 years ago…), may realistically be 95% as useful for solving end user problems. If so, the dominant US chip houses, may find themselves in a bit of a price war……
Just a question
When was the last time a US Treasury Secretary visited another country ?
The trade relations story is just a cover. The US needs Chinese money to buy US Treasury Bonds. So this was basically Yellen applying for a loan.
The loan conditions would make interesting reading.
Chinese stopped buying our bonds years ago.
Get a clue…
Yellen was actually in China to try to trade cluster bombs for rare earth metals.
Yellen was in China pleading with them to buy US securities.
Leslie Gore 1964 : You don’t own me… don’t tell me what to do, don’t tell me what to say…don’t try to change me in any way…
We travel to them, talk to them. We are losing to them.
It is just a state visit so we should not read too much into it except there are two major changes in the world. The first is that Ukraine’s offensive is starting to succeed and that Russia can’t do much about it. We see. Turkey moving from neutrality to active support of Ukraine and Nato’s position as well as no matter how they put it, turmoil in Russian leadership both military and domestic. The second is the Bric initiative which just about all of us here see as doomed to fail and for reason. Nevertheless to ignore this discontent is probably not wise as well and China, like it of not, is at its head so we have to talk to them and deal with them. We both know what each other wants and they are not mutually exclusive contrary to the relations between the West and Russia. We will see.
I don’t see where the success of the Ukrainian offensive lies. I see it more as a bloody disaster for Ukraine. But we probably don’t have the same sources of information. The future will tell who is right
They are believing the SAME lies that was peddled to them during Afghanistan and Iraq, on the SAME media and often by the very SANE liars. Either they are stupid or they desperately *want* to believe those lies. Or both.
We will see ParToutatis. The magic potion lies with Ukraine.
LOL. Reading too many comic books?!
I wondered who would get the reference. I thought Toutatis would but maybe he has never read Asterix. I thought he was French but maybe not. I am glad you got it.
“But we probably don’t have the same sources of information.”
This is likely the heart of the problem, where Putin controls Russia’s media and creates laws that put journalists in jail for not reporting what he desires – The U.S. has a first amendment that allows everyone to speak freely, even those who disagree with the government – such as you.
A better way to understand why a free press is so important is to review Plato’s allegory of the cave.
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The democrats are doing everything possible to eliminate free speech. Particularly when it goes against their narratives.
And free speech and telling the truth are not the same thing.
Then again, if you don’t adhere to America’s Politically Correct agenda you may never have a real job as a journalist or writer ever again. Well, perhaps small fringe websites that few read.
Of course you don’t. You’re paid not to.
“… t is just a state visit so we should not read too much into it…”
Assuming you are serious, it sounds about right for the BIdum administration. Perhaps she was negotiating ‘Dollars for Dumb’, to keep China from blowing Bidum’s deals?
If you dislike Biden so much, don’t vote for him, oh, wait, you can’t vote…
The Ukraine war is definitely the big issue. We are trying to wear down Russia. Friendly overtures to China are with hopes we can keep them from helping Russia. After the Russian-Ukraine war is over it will be back to a hard line with China. They are our biggest competitor for global hegemony.
While we battle trying to get Ukraine into NATO, NATO itself is doomed.
Drinking the COOL-AID!!!!
Ukrainian have “NOT EVEN REACHED THE OFFICIAL RUSSIAN FIRST DEFENSIVE LINE”!!!!
Even BBC interviewing “UKRAINIAN” soldiers, they even admit they are not “GAINING GROUND”!!!
The lines are see sawing back and forth..
Ukraine holds for a day and then the Russians move back in and a few days later Ukraine moves back in..
Showing “Ukrainian” soldiers unfurling their flag in front of a single destroyed building, is “ZERO” proof of “TAKING AND HOLDING GROUND”!!!
Shooting down the Chinese spy balloon after it had traversed the entire USA while Biden dithered was not exactly a “show of force”. More like a “show of ineptitude and indecision”.
It seems strange that a country with advanced rocketry and communications would depend on balloons and wind currents to do surveillance. Perhaps China has endorsed ‘green’ and is looking for low carbon approaches to spying. Or maybe it is part of a sneak nuclear attack strategy? Frankly, it’s ludicrous to release a balloon on the other side of the Pacific and think you have any hope of tracking and positioning with accuracy, especially when it is done every day with satellites. Maybe it really was a weather balloon monitoring upper currents?
The balloon gave them more closer ground photos and videos, then what the Chinese satellite capability..
Supposedly!!
That is the line being given by US experts!!!
I totally believe Janet when she says we are making progress in China. Then I remember that she called climate a crises while saying the banking system is safe and resilient.
I thought she ran Treasury not State. Shouldn’t she be stateside ensuring the safety of our financial system instead of bowing to China? and Ukraine for that matter.
Isn’t that a good question? Either incredible ignorance on the part of the Bidum administration, or they have an ulterior motive. Perhaps a deal to protect both currencies when SHTF.
“Decoupling” is an impossibility.
So is being “half pregnant” but that is what US policy wants.
China has angered too many neighbors. The vietnamese welcomed USS Ronald Reagan carrier a few days ago, India will buy US drones, Philippines wants more US bases…
China is alone with a bunch of crazy guys like Putin and the ayatollahs, not a good bussiness.
On the contrary, from the point of view of military power or natural resources these two allies are the best
Yep Vietnam had their spy apparatus running full tilt during the visit..
US troops and equipment in the Philippines make them easier targets!!!
Have you ever heard of BRICS+.
Vietnam banned Barbie.
Indonesia is going to be in BRICS+
Ever heard of the BRICS?
Heard an interesting take that when Japan continued to keep rates low, therefore depreciating its currency this year while the West was tightening this put more pressure on the yuan and the reason for the depreciation against yankee $.
The Chinese have aggressively been defending the yuan with little success. Their export market to the US is in the doldrums.
China’s PPI is in deflationary territory. It appears that both export and internal demand is low.
Is this quasi rapprochement between the Yellen and China’s counterpart a recognition that China needs the US help in resolving the currency pair problems with yankee dollar as opposed to Blinken and his Chinese counterpart at loggerheads with another?
Wanna bet Premier Li Qiang’s gushing ‘about rainbows arching over U.S.-China relations’ is really a dig at the US’ LGBQ-XYZ culture?
Inscrutable China is both racist and sexist. They are likely offended that a mere woman lectures them, yet Li saves face by his sly, seemingly innocuous ‘rainbow’ comments. Once can only imagine what would happen if Kamala had gone to China.
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“Decouple” overstates the position we need when our national security became dependent on China. We need to regain some independency and diversify our partners.
Raytheon says they can not decouple from our primary competitor… what the heck…when our defense industry depends on China and China is getting all our tech.
“Smiling Faces Hide Mutual Skepticism”
I wouldn’t trust either one.
Great article. There is no way to tell if anything has changed in the relationship. We only get one side of the story. Actions speak louder than words.
Economically, I highly doubt anything has changed. Microelectronics, chips, specialized tools, specialized powders, all these things Chyna needs to enhance and grow its military industrial complex arsenal of standoff weapons. There’s no way to know if any of this changed during discussions.
Strategically, politically, defensively, please see the following video. If we’re not going to change our approach via Japan in the Philippines, none of this matters in the long run. We are headed to confrontation in 2025-2028.
How The Philippines makes the Invasion of Taiwan so difficult: The Bashi Channel
I saw a photo of Yellen BOWING to Chinese official
That ‘official’ was one of Hunter’s business acquaintances,
If you liked that, you’ll looooove this one:
https://www.politico.com/story/2018/06/14/trump-north-korea-general-salute-646248
Circle back – https://twitter.com/TheDailyShow/status/1128329125284868096?lang=en
She bowed to a lesser in the bureaucratic order…she out-ranked that person in the government (CCP). China is decoupling, we are as well. But, they still need some of our tech. That said, Yellen capitulated and clarified that the threat of reducing or eliminating exports to China was a mere idle threat. It’s embarassing.
Why decouple? Many reason, but primarily, the CCP has been planning/.executing this since the 2008 recession. They can’t afford a US/EU econ collapse again and are diligently working towards self-sufficiency…you know…economic Nationalism. Hence the social credit score gives them a higher score/credits for buying CHN goods rather imported goods.