U.S., China need ‘tough’ conversations, Yellen tells Chinese Premier Li

U.S. Treasury Secretary Janet Yellen told Chinese Premier Li Qiang on Sunday that the ability to have difficult conversations has put the two economic superpowers on “a more stable footing” over the past year.

Yellen said at start of a bilateral meeting with Li in Beijing that the two countries had a “duty” to responsibly manage a complex relationship, as she brought her case for reining in China’s excess factory capacity to the highest levels of the Chinese government.

“While we have more to do, I believe that, over the past year, we have put our bilateral relationship on more stable footing,” Yellen said in prepared remarks.

“This has not meant ignoring our differences or avoiding tough conversations. It has meant understanding that we can only make progress if we directly and openly communicate with one another.”

Yellen has made the threat of China’s excess production capacity for electric vehicles, solar panels and other clean energy products to producers in the U.S. and other countries a key focus of her second visit to China in nine months. She visited Beijing in July 2023 to try to normalise bilateral economic relations.

On Saturday in Guangzhou, Yellen and her main economic counterpart, Vice Premier He Lifeng, agreed to launch a new dialogue focussed on “balanced growth”, a forum that Yellen said she intends to use to advocate for a level playing field with China to protect U.S. workers and businesses.

“As the world’s two largest economies, we have a duty to our own countries and to the world to responsibly manage our complex relationship and to cooperate and show leadership on addressing pressing global challenges,” Yellen told Li.