Treasury Secretary Yellen and China's Liu He talk U.S. tech policy at their first in-person meeting

U.S. Treasury Secretary Janet Yellen and Chinese Vice Premier Liu He held their first in-person meeting in Zurich on Jan. 18, 2023.

Sebastien Bozon | Afp | Getty Images

BEIJING — Chinese Vice Premier Liu He discussed U.S. economic and tech policy toward China in a meeting with U.S. Treasury Secretary Janet Yellen on Wednesday, according to a Ministry of Commerce readout.

China “hopes the U.S. side pays attention to the policies’ impact on both sides,” the readout said, according to a CNBC translation.

The meeting in Zurich was the first time Yellen and Liu met in person, after three years of Covid-related restrictions on travel.

In October, the U.S. Department of Commerce’s Bureau of Industry and Security announced sweeping bans on U.S. businesses and persons from working with Chinese partners on high-end semiconductors — a specialized industry that’s relied on American and foreign tools for development. The ban followed the Trump administration’s restrictions on specific Chinese companies such as SMIC and Huawei.

The Biden administration also hasn’t removed Trump-era tariffs on China.

While Beijing retaliated with tariffs of its own, its most substantive response to U.S. tech bans has been filing a dispute with the World Trade Organization in December.

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A readout from the U.S. Treasury Department did not mention technology. “During the candid, substantive, and constructive conversation, they exchanged views on macroeconomic and financial developments,” the Treasury said.

The readout said Yellen “looks forward to traveling to China and to welcoming her counterparts to the United States in the near future.”

The Chinese statement said it welcomed Yellen to visit China “at an appropriate time” this year.

Liu has led China’s trade negotiations with the U.S. Within China, he is a vice premier and head of the financial stability and development committee.

“To tame inflation, some countries have chosen the policy that will likely result in the hike-recession-recovery loop,” Liu said in a speech this week at the World Economic Forum in Davos, Switzerland.

“We call for more attention to the negative spillover effect of major countries’ rate hikes on the emerging markets and developing countries so as not to add to more debt or financial risks,” he said.

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For China, Liu said that “high-quality economic development must always be our goal,” measures to support real estate have shown effect and that the country would put more focus on attracting foreign investment.

Foreign direct investment into China rose by 8% last year in U.S. dollar terms, China’s Ministry of Commerce said. A release noted sharp increases in investment from South Korea, Germany, the U.K. and the EU overall, but did not mention the U.S.

Liu turns 70 years old this month and is retiring from Chinese leadership, per changes announced at the ruling Communist Party of China’s congress in October.

Analysts expect He Lifeng, head of the National Development and Reform Commission, to take Liu’s role in leading financial and economic work.


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