Janet Yellen criticized China’s handling of US companies

Of all the economic rifts between the U.S. and China, U.S. executives have described what they personally perceive as the difficult, even hostile, conditions they face doing business in China.

Treasury Secretary Janet L. Yellen expressed those concerns in Beijing on Friday, expressing strong opposition to the Chinese government’s punitive measures against foreign companies.

Surrounded by executives of some powerful American companies, Mrs. Yellen criticized the Chinese government’s crackdown on companies with foreign ties and its recent decision to impose export restrictions on some key minerals. Such measures, he suggested, vindicated the Biden administration’s efforts to make American manufacturers less dependent on China.

Ms. Yellen’s comments underscore the challenges facing the world’s two largest economies as they struggle to reconcile their deep differences.

The strong defense of US industry came on Ms Yellen’s first day of meetings in Beijing during a high-profile trip to ease tensions between the US and China. This is the first time in four years that a Treasury Secretary has visited China.

“During meetings with my colleagues, I communicate the concerns I hear from the American business community — including China’s use of non-market instruments such as expanded subsidies and barriers to market access for state-owned and domestic enterprises. foreign companies,” Ms. Yellen said at an event hosted by the American Chamber of Commerce in China. “I am deeply troubled by the punitive actions taken against American companies in recent months.” Representatives from Boeing, Bank of America and agricultural giant Cargill were in attendance.

In March, Chinese authorities detained and closed a branch of five Chinese nationals working in Beijing for Mintz Group, an American consulting firm with 18 offices around the world. The following month, authorities questioned employees at the Shanghai office of American management consulting firm Bain & Company.

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The scrutiny of U.S. businesses operating in China follows restrictions imposed by the Biden administration on China’s access to critical semiconductor manufacturing technology and equipment.

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 limit Chinese companies’ access to US cloud computing services in an effort to close a loophole in earlier restrictions on China’s access to advanced chips used in artificial intelligence.

The tit-for-tat continued this week when Beijing retaliated against the Biden administration’s limits on semiconductors, announcing that it would restrict exports of some critical minerals used in the production of some chips.

An official from China’s Ministry of Finance said on Friday that Ms. He expressed hope that the meetings with Yellen would improve economic relations and suggested that the United States should take steps to make that happen. The official added that both countries do not benefit from the “disconnection” and disruption of supply chains.

Ms Yellen said on Friday she was “concerned” by China’s decision to impose export restrictions.

“We are still evaluating the impact of these measures, but they remind us of the importance of building resilient and diversified supply chains,” Ms. Yellen said. He suggested that additional responses from the United States could be forthcoming to ensure that American businesses and workers are treated fairly.

“I will always champion your interests and work to ensure a level playing field,” Ms. Yellen added. “This includes coordinating with our allies to respond to China’s unfair economic practices.”

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Businesses are also spooked by China’s ever-tightening national security laws, which include a tough counter-espionage law that came into force on Saturday. The US State Department issued a warning this week advising Americans to reconsider traveling to China because of the possibility of false detention.

Chamber President Michael Hart said American companies are trying to play a constructive role in the economic relationship between the United States and China.

“No matter what happens at the political level, we are trying to find common ground with our Chinese counterparts by working, producing, producing, buying, selling, paying taxes and doing everything in a way that reflects our values,” said Mr. Hart, who sat next to Ms. Yellen. And we believe it will benefit both the US and China.”

The Treasury secretary plans to raise these issues during meetings with top Chinese officials over the next two days.

In addition to the business leaders, Ms. Yellen also met on 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 Ms. Yellen discussed the outlook for the economy in an informal discussion that lasted more than an hour with her former colleagues.

Later on Friday afternoon, he met with Premier Li Qiang at the Great Hall of the People.

China’s no. 2 Chairman Mr. Before the meeting with Lee, Ms. Yellen stressed the importance of “healthy competition” between the two countries, and insisted that US actions should not be misconstrued on the basis of national security. Attacks on China

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“The United States must, in certain circumstances, pursue targeted actions to protect its national security,” Ms. Yellen said. “We may disagree on these events.”

He added: “However, any disagreement would lead to misunderstandings that would unnecessarily worsen our bilateral economic and financial relationship.

Sitting next to Ms. Yellen, Mr. Li noted that the world had high expectations for their meeting.

Prime Minister who gave a ray of hope, Smt. When Yellen arrived in Beijing, she was photographed pointing to a rainbow in the sky and noted that it was a sign that relations between China and the United States could improve.

“I am very much looking forward to this opportunity to exchange ideas with you,” said Mr. Li said through an interpreter.

Claire Fu Contributed report.

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