Treasury Secretary Janet Yellen on Friday criticized the Chinese government’s harsh treatment of companies with foreign ties and its recent decision to impose export controls on certain critical minerals, suggesting that such actions justify the Biden administration’s efforts to make U.S. manufacturers less reliant on China.
Yellen delivered the forceful defense of American industry on her first day of meetings in Beijing during a high-stakes trip to ease tension between the United States and China. Her comments, to a group of executives from American businesses operating in China, underscored challenges that the world’s two largest economies face as they look to move beyond their deep differences.
“During meetings with my counterparts, I am communicating the concerns that I’ve heard from the U.S. business community – including China’s use of nonmarket tools like expanded subsidies for its state-owned enterprises and domestic firms, as well as barriers to market access for foreign firms,” Yellen told members of the American Chamber of Commerce in China at a roundtable event. “I’ve been particularly troubled by punitive actions that have been taken against U.S. firms in recent monthsb ” Representatives of Boeing, Bank of America and the agriculture giant Cargill were among those in attendance.
In March, Chinese authorities detained five Chinese nationals working in Beijing for the Mintz Group, an American consulting company with 18 offices around the world, and closed the branch. The next month, authorities questioned employees in the Shanghai office of Bain & Co., the U.S. management consulting firm.
Scrutiny of American businesses operating in China followed restrictions that the Biden administration imposed on China’s access to critical semiconductor-making technology and tools.
The Biden administration is preparing additional restrictions on U.S. technology trade with China, including potential limits on advanced chips and U.S. investment in the country. The administration is also preparing to restrict Chinese companies’ access to U.S. cloud computing services, in an effort to close a loophole in earlier restrictions on China’s access to advanced chips used for artificial intelligence.
Besides the business leaders, Yellen was also meeting Friday with Liu He, China’s former vice premier, and Yi Gang, the outgoing governor of the People’s Bank of China. A Treasury Department official said that Yellen discussed the outlook for the economy in an informal discussion with her former counterparts that lasted more than an hour.
Later Friday afternoon, she will meet with Premier Li Qiang at the Great Hall of the People.
