WASHINGTON: US Treasury Secretary Janet Yellen on Thursday mapped out her top priorities for managing US-Sino relations next year, including a planned second visit to China and steps to accelerate cooperation on climate risks and financial markets.
In remarks prepared for a dinner hosted by the US-China Business Council, Yellen stressed that Washington does not want to decouple from China, but is working to establish “durable” communications channels to deal with problems as they occur.
“We seek not to resolve all our disagreements nor avoid all shocks. This is in no way realistic,” she said in excerpts released by the Treasury Department. “But we aim to make our communication resilient, so that when we disagree, when shocks occur, we prevent misunderstanding from leading to escalation and causing harm.”
Yellen mit with Chinese Vice Premier He Lifeng before last month’s Asia-Pacific Economic Cooperation (APEC) gathering of leaders in San Francisco, and told reporters she accepted an invitation to return to China next year. Yellen made her first visit to China as Treasury secretary in July.
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Until earlier this year there had been very little contact between Washington and Beijing on economic issues, with relations strained by former President Donald Trump’s tariff war with Beijing and more recent US national security restrictions on Chinese access to US technologies.
In Thursday’s remarks, Yellen underscored Washington’s plans to keep pressing China - the world’s second-largest economy after the US - on its national security actions and for answers on how it intends to deal with challenges with local government debt and its real estate market.
Washington would also continue to demand transparency on China’s non-market practices and foreign exchange practices, she said.
To ensure quick responses in the event of financial stresses, Yellen said the United States and China would facilitate exchanges between their financial regulators, as Washington already does regularly with major financial centers such as the European Union and the United Kingdom.
Washington and Beijing already had efforts underway to exchange information about modeling climate stress scenarios, a step Yellen called “crucial” to preparing for the threat climate change poses to financial systems.
They were also facilitating a technical exchange on how each jurisdiction would respond in the event of the failure of a global systemically important bank in either country, and how such a response could be coordinated, Yellen said.
Treasury will also press China for faster progress on sovereign debt restructurings and advocate for changes to the debt architecture, Yellen said, citing opportunities for collaboration at the intersection of debt and climate.
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