The US Treasury secretary, Janet Yellen, has arrived in Beijing on a four-day trip that aims to tame spiralling tensions between the world’s two largest economies, particularly over trade and the hi-tech chip industry.
It is the second visit by a US cabinet official this year and is expected to highlight both the interdependence and the mistrust that characterises the relationship between the two superpowers.
It takes place against a backdrop of hostilities from both sides, with the biggest focus at present the clash over chips vital for advanced technology including military equipment and artificial intelligence. Other areas of dispute include Taiwan, China’s support for Russia as it wages war in Ukraine, and human rights.
But there are also strong incentives for both sides to try and patch up the relationship where possible.
Cooperation between Washington and Beijing is vital to progress on global threats including the climate crisis. Their economies are so closely entwined that escalating trade controls risk causing serious damage to both. And without good channels of communication, there is a greater risk that flashpoints such as military patrols near Taiwanese airspace and territorial waters could escalate.
In Beijing, Yellen will discuss the need to “to responsibly manage our relationship, communicate directly about areas of concern, and work together to address global challenges,” the US Treasury said.
Washington, together with its allies, controls the most advanced technology in the world. Lawmakers from both sides of the political divide are concerned that China might overtake America in terms of overall military power, and that it could do so by exploiting US advances.
Last October, driven by these concerns, the Biden administration imposed controls on the sale of semiconductors and chip-making equipment to China and is reportedly preparing to toughen restrictions in this area.
On Monday, China said it had placed new controls on exports of two metals used in chip manufacturing, gallium and germanium.
State controlled tabloid the Global Times framed the regulations as a direct response to the US move: “There’s no reason for China to continue exhausting its own mineral resources, only to be blocked from pursuing technological development.”
In an April speech, Yelland laid out three priorities for the US in its ties with China. The first was protecting national security interests and human rights through targeted actions that were “not intended to gain economic advantage”.
The second was seeking a “healthy economic relationship with China that fosters mutually beneficial growth and innovation”. The final priority was cooperation on “urgent global challenges” such as the climate crisis.
