Reviving Diplomacy: Yellen's Beijing Trip Sets Stage for Rebuilding China-US Relations

By Saud Faisal Malik | Gwadar Pro Jul 9, 2023

Editor's Note: The author is Saud Faisal Malik, CEO of Daily CPEC. The article only reflects the opinion of the author and not necessarily of Gwadar Pro.

US Treasury Secretary Janet Yellen recently started on a highly anticipated trip to Beijing in an attempt to repair frayed US-China relations. This diplomatic mission has piqued the interest of people all across the world, eliciting both hope and skepticism. While some see Yellen's visit as a watershed moment for communication and cooperation, others are skeptical of the potential benefits. However, it is critical to recognize the importance of such diplomatic efforts in overcoming present hurdles and bringing these global powerhouses toward a more stable and mutually beneficial partnership.

Both countries have witnessed a worrying increase in harsh rhetoric and retaliatory measures, particularly in the economic sector. Washington has enacted a slew of export controls, limiting Chinese firms' access to advanced semiconductors  and seeking the assistance of its friends in implementing similar legislation. Beijing responded by imposing export restrictions on crucial strategic raw materials such as gallium and germanium, which are critical in the global chip manufacturing supply chain.

By engaging in face-to-face discussions, Yellen aims to address the underlying concerns driving these economic tensions and explore avenues for collaboration. It is through such dialogue that US and China can potentially find mutually beneficial solutions, foster stability in global supply chains, and restore confidence in economic relations.

Yellen's Beijing trip signifies a renewed commitment to diplomatic dialogue, which has been lacking in recent years. The strained relationship between US and China has been characterized by escalating trade tensions, geopolitical conflicts, and a growing trust deficit. However, constructive engagement through face-to-face interactions presents an opportunity to bridge these gaps and restore a level of trust essential for rebuilding relations.

One of the main goals of Yellen's visit is to encourage economic cooperation between the two countries. The economic interdependence between China and the United States is evident, and their collaboration has the potential to benefit both countries significantly. They can uncover new opportunities, boost innovation, and solve common global concerns such as climate change and sustainable development by strengthening economic links.

Centuries of economic data indicate that Chinese exports have effectively contributed to maintaining low inflation in the United States. Major American companies like Walmart and Apple heavily rely on "affordable" Chinese products and services, resulting in continuously decreasing prices that benefit American consumers.

However, Biden’s administration is currently facing a crucial election year, and the continuation of inflationary impacts resulting from US-China tariffs is the last thing it needs. This situation adds to the existing economic pressure created by the administration's ambitious infrastructure program and protectionist program, both of which require substantial levels of borrowing. Consequently, ensuring the financing of this debt will necessitate assurances from China and Japan, who happen to be the largest foreign holders of US debt.

Trade tensions have been at the core of the China-US relationship for years. Yellen's visit provides an opportunity to address these concerns and find a way forward. A cooperative approach, rather than a confrontational one, could lead to fair and balanced trade policies that benefit both countries' economies. By engaging in constructive negotiations, the United States and China can work towards resolving existing trade disputes and establishing a framework for future cooperation, ensuring a more stable global economic environment. It is highly imperative that the US maintains trusted ties with China and relaxes its policies to facilitate future economic progress.

While Yellen's visit holds promise for a better future in China-US relations, it is essential to manage expectations realistically. Rebuilding trust and resolving long-standing disputes will not happen overnight. It requires a sustained commitment from both sides to engage in productive dialogue, compromise, and find common ground. However, Yellen's visit represents a crucial step toward initiating this process.

Janet Yellen's visit to Beijing represents an incredible opportunity for China-US relations to be rebuilt. While problems persist, it is critical to recognize the importance of these diplomatic efforts and to be optimistic about a brighter future marked by increasing cooperation, understanding and shared prosperity.

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