US, China need 'tough' conversations, Yellen says

US 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.

As they began a meeting in Beijing, Li responded that the two countries needed to respect each other and should be partners, not adversaries, adding that "constructive progress" had been made during Yellen's trip.

Yellen said Washington and Beijing had a "duty" to responsibly manage the complex relationship, as she brought her case for reining in China's excess factory capacity to the Chinese leadership.

"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. "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 of electric vehicles (EVs), solar panels, and other clean energy products to producers in the US and other countries a focus of her second visit to China in nine months.

She visited Beijing in July 2023 to try to normalize bilateral economic relations after a period of heightened tension caused by differences over issues ranging from Taiwan to COVID-19's origins and trade disputes.

In a further sign of the ties stabilizing, US President Joe Biden and Chinese President Xi Jinping sought to manage tensions over the South China Sea in a nearly two-hour call on Tuesday, their first direct talks since a summit in November.

US and Chinese military officials met their Chinese counterparts last week for a series of rare meetings in Hawaii focussed on operational safely and professionalism.

On Saturday in the southern export hub of Guangzhou, Yellen and her main economic counterpart, Vice Premier He Lifeng, agreed to launch a dialogue focussed on "balanced growth". Yellen said she intends to use the forum to advocate for a level playing field with China to protect US 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, cooperate, and show leadership in addressing pressing global challenges," Yellen told Li.

Reuters