Janet Yellen criticized China’s handling of US companies

Of all the economic divisions between the United States and China, one that is felt personally by American executives is what they describe as the difficult, even hostile, conditions they face doing business in China.

Treasury Secretary Janet L. Yellen expressed those concerns in Beijing on Friday by strongly objecting to punitive measures taken by the Chinese government 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 actions, he suggested, vindicated the Biden administration’s efforts to make American manufacturers less dependent on China.

Ms. Yellen’s comments to a group of executives from U.S. companies operating in China underscored the challenges the world’s two largest economies face 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. In the first visit to China by a Treasury secretary in four years, he voiced his objections to top Chinese officials, including Premier Li Keqiang.

“During meetings with my colleagues, I am relaying the concerns I have heard from the American business community — including China’s use of non-market instruments such as expanded subsidies and barriers to market access for its state-owned enterprises and domestic enterprises. Foreign firms,” ​​he said at an event hosted by the American Chamber of Commerce in China. Ms Yellen said: “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 attended.

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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.

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 preparing to limit China’s use of advanced artificial intelligence chips and restrict Chinese companies’ access to US cloud computing services.

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 key minerals used in the production of some chips. Ms Yellen said on Friday that she was “concerned” by China’s export restrictions and that further responses from the United States may be forthcoming.

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.

Longtime observers of the US-China relationship were skeptical about the prospects for rapid progress.

Shi Yinhong, a political scientist at Renmin University in Beijing, said Ms. Yellen’s visit could not be expected to “really significantly reduce” the many and wide differences between the two countries. But given those differences, he said, Chinese officials are unlikely to be surprised by Ms. Yellen’s comments in favor of American businesses in China.

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“I suspect there will be high expectations on the Chinese side,” he said.

US businesses are spooked by China’s ever-tightening national security laws, which include a tough counter-espionage law that took effect 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’re trying to find common ground with our Chinese counterparts by working, producing, manufacturing, buying, selling, paying taxes and doing everything in a way that reflects our values,” said Mr. Hart, who sat next to Ms. Yellen.

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

Ms. Even as Yellen addressed the grievances of American businesses, Chinese companies felt a chill of mistrust in the United States, with Chinese officials saying Ms. Meet Yellen.

“Unfortunately, these mutually beneficial relationships have now become politicized, insecure and demonized — seen as having an impact on national security,” said Wang Yong, director of the Center for American Studies at Peking University. “But while I personally call it a strategic rivalry between China and the United States, they still have many common interests.”

Chinese businesses have been unsettled by recent U.S. actions, such as congressional investigations into Chinese-owned social media network TikTok and deepening U.S. restrictions on Chinese investments and corporate deals. was added.

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Ms Yellen also met with China’s former vice-premier Liu He and Yi Gang, governor of the People’s Bank of China, on Friday. 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, Mr. He met Lee.

China’s no. 2 Chairman Mr. Prior to the meeting with Li, Ms. Yellen stressed the importance of “healthy competition” between the two countries. He also stressed that the steps taken by the US on the basis of national security should not be misconstrued. Attacks on China

“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, Keith Bradsher And Christopher Buckley Contributed report.

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