For years now, the United States and China have been engaged in an unprecedented trade war. However, the US Treasury Secretary, Janet Yellen, clarified that her country seeks “constructive and fair” economic ties with China.
In the presentation he gave at the Johns Hopkins University School of Advanced International Studies, he considered the economic relationship between the two largest economies in the world “essential”, although he acknowledged that “our relationship is clearly at a tense moment.”
Yellen compared strong growth in the US to slowing GDP in China, arguing that her country would remain the world’s economic leader in metrics ranging from wealth to technological innovation.
But he made it clear that a growing China was in the interest of both countries, as long as it followed global rules.
In this sense, he explained that the Democratic administration seeks to promote “healthy competition” and cooperation, whenever possible, on global issues such as climate change, debt relief and macroeconomic stability.
And he added that the Biden administration was not looking for a winner-take-all competition, believing that healthy economic competition with a fair set of rules could benefit both countries over time.
However, as expected, the official was also highly critical of the Asian Giant, saying that as the world’s largest official bilateral creditor, it should participate in significant debt relief for countries facing problems.
Last week, world financial officials from creditor and debtor countries, the IMF, the World Bank and the private sector met in Washington to try to speed up debt restructuring efforts. The IMF estimates that more than half of low-income countries are close to or can no longer afford them.
China has long been unwilling to accept loan losses unless private sector creditors and multilateral development banks shoulder their share of the burden.
“China’s participation is essential for meaningful debt relief, but for too long it has not moved in a comprehensive and timely manner. It has served as an obstacle to necessary action,” Yellen said.
