By Matt Egan, CNN
December 14, 2023
United States Secretary of the Treasury Janet Yellen speaks at the Atlantic Council Global Citizen Awards, Sept. 20, 2023, in New York.
Washington, D.C.CNN — Treasury Secretary Janet Yellen is on a mission to repair the fragile yet vital relationship between the United States and China. That mission will kick into high gear next year.
Yellen plans to reveal her 2024 US-China gameplan in a major speech to business leaders on Thursday evening.
According to excerpts of that speech, shared first with CNN, Yellen will detail her 2024 priorities in improving US-China economic ties: improving communications between the world’s two largest economies, pushing Beijing for greater transparency, ramping up regulatory collaboration and tackling thorny issues like terror financing and the flow of fentanyl.
The remarks, set to be delivered at the US-China Business Council’s 50th anniversary dinner in Washington, represent Yellen’s first description of her 2024 goals on the US-China economic relationship.
“We seek not to resolve all our disagreements nor avoid all shocks. This is in no way realistic,” Yellen plans to say. “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.”
The US-China relationship, arguably the most important bilateral relationship on the planet, ends 2023 in a much better place than where it began. Relations hit a low point in February when US President Joe Biden ordered the shooting down of a Chinese spy balloon.
Yet tensions have eased in recent months, paving the way for visits to China by senior US officials including Yellen and Secretary of State Antony Blinken and punctuated by last month’s four-hour meeting between Biden and Chinese leader Xi Jinping.
Now, US officials are hoping to build on that momentum.
In a sign they are satisfied with recent progress, Yellen is aiming to return to China during the first half of next year, a person familiar with the matter tells CNN. These plans to go back to China are still being decided, the source said.
“I plan to take my second trip to China as Treasury secretary, where a significant portion of the agenda will focus on discussing difficult areas of concern with my counterpart,” Yellen plans to say in Thursday’s speech.
In November, Yellen told reporters at a news conference following two days of meetings with Chinese Vice Premier He Lifeng that she looked forward to traveling to China at some point next year.
In her speech on Thursday, Yellen will acknowledge that potholes still loom on the US-China front.
“We know that this relationship will face continued challenges. There are many areas on which the US and China strongly disagree,” Yellen plans to say. “There is also always the risk of shocks that impact both of our countries.”
For instance, Yellen will signal that US officials remain committed to new limits on outbound investments to China and pressing China on national security concerns.
“Continuing to stabilize our relationship to prevent escalation won’t make news,” Yellen plans to say. “But our economies, our people – and again, also economies and people around the world – will be safer and more secure.”
The speech comes just days after the House Select Committee on the Chinese Communist Party released a report outlining its bipartisan strategy to “fundamentally reset” America’s relationship with China.
“It embraces the clear reality that our current economic relationship with the People’s Republic of China needs to be reset in order to serve the economic and national security interests of the United States,” Republican Chairman Mike Gallagher and Democratic ranking member Raja Krishnamoorthi said in a statement on Tuesday.
Business leaders and global investors have been watching nervously as China grapples with a real estate crisis that slows its growth. The stakes are significant as China is the second-largest economy in the world, and a key engine for global growth.
Yellen plans to push Beijing for better insight into how officials there will address these problems — especially if they worsen.
“Financial shocks in China – and China’s response to them – do not occur in isolation,” Yellen plans to say. “Understanding China’s plans, especially how China intends to respond to challenges with local government debt and the real estate market or how it might react if unexpected weakness in its economy should arise, is crucial for those of us charged with policymaking in the United States.”
Recently, US officials and China have begun teaming up with meetings of working groups focused on the economy and financial markets.
Next year, the United States and China plan to facilitate exchanges between financial regulators, according to Yellen. That’s something US officials already do with the European Union and the United Kingdom.
“For economic policymakers responding to financial stress,” Yellen will say, “it is critical to know the counterpart on the other end of the line and be able to make a quick call.”