US Treasury Secretary Janet Yellen called for enhanced communication between China and the United States on Saturday, emphasising the importance of improving economic decision-making and urging China to join global initiatives to address climate change in poorer nations.

Despite existing tensions, the robust trade between the US and China in the past year indicates significant opportunities for engagement in trade and investment. Yellen stressed the critical need to focus on areas of shared interest and resolve disagreements through dialogue during her meeting with Chinese Premier He Lifeng, which was scheduled to last over three hours.

Yellen’s visit, extending until Sunday, represents Washington’s latest effort to mend relations between the world’s two largest economies. 

Issues such as Taiwan and technology have strained their ties, impacting companies and trade. 

Yellen, like US Secretary of State Antony Blinken during his recent visit, seeks a delicate balance between conciliation and urging Beijing to address practices that harm American and Western companies. 

While both sides downplayed expectations for significant breakthroughs, they recognised the value of candid face-to-face diplomacy.

Yellen emphasised the importance of closer communication between the two economic powerhouses to gain a comprehensive understanding of the global economic outlook and make informed decisions to strengthen their economies. She also reiterated the US commitment to ensuring healthy competition based on fair rules that would benefit both nations over time.

During her meeting with Premier He, Yellen expressed her willingness to collaborate, underscoring the significance of maintaining open and honest lines of communication between the American and Chinese people. She highlighted the importance of nurturing and deepening ties, particularly as China emerges from three years of COVID-19 lockdowns.

While China’s economic rebound has been slower than expected, heightening the risk of a global slowdown, the US aims to re-engage with China at various levels. Beijing has repeatedly called for the US to match words with actions, pointing to ongoing efforts to restrict Chinese access to technologies, including semiconductors. 

Bilateral military ties have yet to resume, and tariffs imposed during the previous administration’s trade war remain in place.

Ahead of Yellen’s visit, China unexpectedly announced export controls on two metals widely used in semiconductors and electric vehicles, citing national security concerns. Nevertheless, Premier Li Qiang left the door open to further dialogue, urging Yellen to meet China halfway and inject positive energy into bilateral ties.

Despite discussions surrounding US-China economic decoupling, both nations oppose such a scenario, and data reveals a fundamentally strong trade relationship, with total two-way trade reaching $690 billion last year. 

Yellen affirmed that the US would continue to directly address concerns about specific economic practices and take targeted actions to safeguard national security.

Yellen also emphasised China’s capacity to contribute to combating the existential threat of climate change. She underscored the shared responsibility of both China and the US, as the world’s largest greenhouse gas emitters and investors in renewable energy, to lead efforts in supporting developing nations in achieving their climate goals and managing the impacts of climate change. Cooperation on climate finance was identified as a critical responsibility.

While China is classified as a developing country by the United Nations, it has expressed a willingness to voluntarily contribute to addressing “loss and damage” resulting from climate change.

Overall, Yellen’s visit aims to improve communication and collaboration between the US and China, fostering a more constructive relationship that addresses economic challenges and tackles climate change on a global scale.