‘Disastrous’: Janet Yellen Warns Against Economically Decoupling From China
The United States has no desire to economically decouple from China as it would have catastrophic consequences, Treasury Secretary Janet Yellen said in a Thursday speech at Johns Hopkins University’s School of Advanced International Studies.
China has recently moved toward a more government-guided economy that has unfairly damaged countries around the globe; however, the well-being of the Chinese and U.S. economies is tightly connected, Yellen said. Its unjust economic practices have led to too many critical goods manufactured there, but a prosperous China that “plays by the rules” can be positive for the United States, she argued.
“A full separation of our economies would be disastrous for both countries,” Yellen said. “It would be destabilizing for the rest of the world.”
The countries are the two biggest economies on the planet, and trade between them passed $700 billion in 2021. Only U.S. trade with Canada and Mexico surpasses its trade with China.
China puts up obstacles to market access for American companies that Chinese businesses do not face in the United States, such as limiting technology transfer to domestic firms, Yellen said, giving Chinese firms an advantage. She also said the U.S. is concerned about a recent rise in coercive actions against American companies, as China promotes foreign investment.
“We will make America into the manufacturing superpower of the world and will end our reliance on China once and for all,” former President Donald Trump said in 2020. “Whether it’s decoupling, or putting in massive tariffs like I’ve been doing already, we will end our reliance in China, because we can’t rely on China.”
China has taken an increasingly aggressive stance toward the United States and allies and partners worldwide, but at a point of global crisis, Yellen stressed the need for productive cooperation between the countries. She acknowledged that the U.S.-China relationship is experiencing a “tense moment.”
“The United States believes that responsible economic relations between the U.S. and China is in the self-interest of our peoples. It is the hope and expectation of the world,” Yellen concluded. “And at this moment of challenge, I believe it must be the choice that both countries – the United States and China – make.”
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