Yellen says she’s ‘concerned’ about China’s new export controls in her first public remarks in Beijing

U.S. Treasury Secretary Janet Yellen (R) shakes hands with U.S. Ambassador to China Nicholas Burns (L) on her arrival in Beijing on July 6, 2023, as Yang Yingming, Director General of the Department of International Economic Relations of China’s Ministry of Finance, looks on.
Mark Schiefelbein | Afp | Getty Images

BEIJING — U.S. Treasury Secretary Janet Yellen said Friday she is “concerned” about the export controls China announced this week.

China’s Ministry of Commerce announced Monday that starting Aug. 1, companies in China that want to export two metals used in semiconductor manufacturing would need to apply for licenses.

“I am also concerned about new export controls recently announced by China on two critical minerals used in technologies like semiconductors,” Yellen said in prepared remarks for a meeting with U.S. businesses in Beijing.

“We are still evaluating the impact of these actions, but they remind us of the importance of building resilient and diversified supply chains.”

The Biden administration has announced measures aimed at bolstering American tech capabilities and limiting China’s access to advanced tech. Those include sweeping export controls that took effect in October and restrict the ability of U.S. businesses to sell certain advanced computing semiconductors or related manufacturing equipment to China.

Yellen said that in her meetings with the Chinese government, she “made clear that actions we take to protect our national security are designed to be narrowly targeted.”

“They are premised on straightforward national security considerations and not undertaken to gain economic advantage over China.”

Beijing has so far taken relatively few actions. In May, China said U.S. chipmaker Micron had failed a security review and banned operators of critical infrastructure from buying from the company.

And this week, China’s Commerce Ministry announced its forthcoming export ban on the metals gallium and germanium. The ministry said Thursday its new rules did not target a specific country.

China has meanwhile doubled-down on efforts to attract foreign investment and engage businesses. The Commerce Ministry said Wednesday it met with 12 foreign pharmaceutical companies to understand their business challenges.

Yellen said Friday in her meeting with American businesses that she’s “been particularly troubled by punitive actions that have been taken against U.S. firms in recent months.”

Her visit to China, Yellen’s first under the Biden administration, follows U.S. Secretary of State Antony Blinken’s high-stakes trip to Beijing last month. Blinken also met with U.S. businesses in China during his trip.

Yellen, a former head of the U.S. Federal Reserve, has generally emphasized the economic importance of the U.S.-China relationship. Mainland China is the second-largest holder of U.S. Treasurys, behind Japan.

She said Friday the U.S. “does not seek” to separate its economy from China’s, and that “healthy economic competition” benefits both sides, according to her prepared remarks to businesses.

“In the economic realm, regular exchanges with our Chinese counterparts can help us monitor economic and financial risks, and it can help create the conditions for a healthy economic relationship between our two countries,” she said.

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