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July 7 (UPI) -- In public comments on Friday, U.S. Treasury Secretary Janet Yellen told China's Premier Li Qiang that their disagreements should not worsen the countries' economic and financial relationships. Yellen is visiting Beijing in an effort to improve relations with China amid tensions on a range of issues from Taiwan to human rights and the South China Sea.
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"We seek healthy economic competition that is not winner-take-all but that, with a fair set of rules, can benefit both countries over time," Yellen said in prepared comments. "There are also important global challenges where the United States and China have a duty both to our own countries and to the world to cooperate and show leadership."
Yellen said the United States at times will need to take actions to protect its national security that may clash with China.
"However, we should not allow any disagreement to lead to misunderstandings that unnecessarily worsen our bilateral economic and financial relationship," Yellen said.
"I agree with what you said in your speech at the World Economic Forum that 'differences should not be a cause for estrangement, but a driver for more communication and exchange.' It is my hope that this visit can spur more regular channels of communication between our two countries."
Yellen arrived Thursday on a four-day trip as the world's two largest economies have imposed seemingly tit-for-tat punitive measures against each other in recent months.
She is expected to continue discussions with Chinese officials on managing the U.S.-China relationship with high-ranking Chinese officials and creating dialog over the economic issues between the two countries.
During a roundtable discussion Friday with representatives from American businesses operating in China, Yellen said she's been informing her Chinese counterparts about the concerns the United States has over Beijing's recent moves, while downplaying those taken by Washington as national security issues, and not economic ones.
"I've been particularly troubled by punitive actions that have been taken against U.S. firms in recent months," she said, according to prepared remarks.
"I'm also concerned about new export controls recently announced by China on two critical minerals used in technologies like semiconductors. We are still evaluating the impact of these actions, but they remind us of the importance of building resilient and diversified supply chains."
On Monday, China's commerce ministry said it had enacted new export restrictions on the key semiconductor metals of gallium and germanium, requiring exporters to secure a license to ship the two metals and related products starting Aug. 1. Beijing said the measures were put in place "in order to safeguard national security and interests."
Tensions between China and the United States have been climbing for years and are spilling into the realm of economics.
Amid the global competition, the United States has taken actions to limit China's involvement in the manufacturing of not only its critical infrastructure but that of its allies while also restricting Beijing's access to U.S.-made technology, citing national security concerns.
The Biden administration has also targeted China's ability to purchase and manufacture high-end computer chips while pursuing a policy to boost domestic manufacturing of semiconductors to wean its dependence on China for the increasingly necessary component and diversify its supply chain, which was proven at risk by the COVID-19 pandemic.
The situation seemingly began to escalate in October when the Biden administration enacted chip export controls on China. Thea Rozman Kendler, assistant secretary of Commerce for export, said in a statement at the time that Beijing is using that technology to power its military modernization and to monitor, track and surveil its own citizens.
In the eight months since, China has enforced seemingly retaliatory measures against U.S. companies.
In March, Chinese authorities raided the Beijing office of U.S. due diligence firm Mintz Group. The next month, U.S. consultancy agency Bain & Co. staff in Shanghai were questioned by Chinese Police.
In May, China banned domestic companies working in the critical information security sector from buying products manufactured by U.S. firm Micron Technology, citing national security.
Yellen on Friday told the U.S. business leaders that she has made clear that the United States is not seeking to decouple its economy from China but that it is diversifying its own economy. A decoupling of the two largest economies, she said, would destabilize the global economy.
She also said the actions the United States has taken over national security have been "narrowly targeted."
"They are premised on straightforward national security considerations and not undertaken to fain economic advantage over China," she said, stating trade between their two countries was at an "all-time high" last year.
"A stable and constructive relationship between the U.S. and China is in the interests of the American workers and businesses," she said.
