She added, “It’s important for us to explain why we’re doing things, how it’s delineated, that it’s not an attempt to completely paralyze China’s economy and stop its development.”
Despite Ms. Yellen’s hopes for better relations, she has in the past criticized China publicly.
In the spring, Ms. Yellen publicly urged China to pressure Russia to end its war in Ukraine and warned that its reputation as a global economic power could be eroded if it helped Russia evade sanctions. Ms. Yellen said that she was not certain if China had tried persuade Russia to retreat, but that she did not believe that China was evading U.S. sanctions.
This week, while traveling in India, Ms. Yellen promoted Biden administration’s policy of “friend-shoring” and urged India and other allied nations to diversify their supply chains away from China.
In a speech at Microsoft’s offices near New Delhi, the Treasury secretary highlighted China’s problematic human rights record and praised Apple for shifting some of its iPhone manufacturing from China to India. She also lauded investments that have allowed an American solar manufacturer to set up operations in India instead of China, noting that solar panel materials produced in China’s Xinjiang region are made with forced labor.
The Treasury Department has also been critical of China for obfuscating its foreign exchange practices. In a report on global foreign exchange practices this past week, the United States kept China on its list of countries that it watches closely.
“China’s failure to publish foreign exchange intervention and broader lack of transparency around key features of its exchange rate mechanism make it an outlier among major economies and warrants Treasury’s close monitoring,” the report said.
Ms. Yellen said that her meeting on Monday with Mr. Yi, the central bank governor, would be informal and that they would most likely discuss macroeconomic issues. She hopes that more communication about their mutual concerns will improve the bilateral relationship.
“We have national security concerns and if our policies are having unintended consequences more broadly for China, it’s important to be able to hear what their concerns are and potentially to respond to those,” Ms. Yellen said. “We have concerns about their economic practices as well.”
