19.04.2024 Author: Vladimir Terehov

US Treasury Secretary’s visit to China as an element of Washington’s crisis management of relations with Beijing

US Treasury Secretary Janet Yellen's week-long visit to China

US Treasury Secretary Janet Yellen’s week-long visit to China, the second in less than a year, which began on 3 April, represents a remarkable development in relations between the world’s two leading powers. Among other things, it is noteworthy because it came almost immediately after the telephone conversation between the two leaders, which was the first contact between them since they met in San Francisco on the sidelines of the next APEC summit in November 2023.

In the six months since then, the long process of accumulation of various kinds of negativity in the bilateral relationship has continued. And it has done so at a pace and to a degree that far exceeds what has been observed on the positive side of the development space of these relations. Two rare examples of such events in recent months have already been commented on in NEO here and here.

These now include Joseph Biden’s aforementioned phone call to Xi Jinping and the 3-4 April meeting of a joint working group of military experts in Hawaii to ensure, as the Chinese Ministry of Defence put it, the “healthy, stable and sustainable development” of defence relations. We note immediately (more below) that the actual events do not fit well with the definition of “healthy” in this area of bilateral relations.

The visit of the US Treasury Secretary to China, which the Chinese Global Times sees as evidence of “further stabilisation of Sino-US relations”, could also be seen as positive. At the same time, however, this only refers to the financial and economic aspects of the relationship.

But even in this area, only the impressive figure of the total volume of bilateral trade, which has hovered around $700 billion in recent years, can arouse positive emotions. But as with any “integral” characteristic of a complex phenomenon, the latter “sews together” very different elements. For example, the trade balance, which has been negative for the US for years, has consistently hovered around $400 billion. Despite the attempts made by the previous administration (together with China, it should be stressed) to gradually reduce this negative indicator.

In addition, the economy is an extremely important, but still one of the spheres of interstate communication. As a rule, it is embedded in a much larger area of political relations. The peculiarities of the latter lead Washington to take punitive and restrictive measures against Beijing, for example in the production of micro-elements (“chips”), which are counterproductive from a purely economic point of view. These measures are also contrary to the basic rules of international trade, despite the fact that Washington itself was at the origin of these rules.

In other words, the very “purely economic” problems in the relationship between the two leading world powers cannot be discussed outside the political context. Therefore, it seems undoubtedly that Yellen’s powers during this and previous visits to China went far beyond the limits imposed by the fact of her current position in the current US administration.

In fact, this is also mentioned in the official report of the US Treasury Department dated 2 April this year, when among the tasks of the forthcoming trip of the head of this department is mentioned the problem of “first and foremost, ensuring security and compliance with our and our allies’ national interests, including human rights”.

During her stay in China, the guest attended various events and had the opportunity to meet with state and party officials, including those at the highest level. In particular, she was received in Beijing by Premier Li Qiang. As far as can be understood, during the talks, in addition to the protocol plan of mutual courtesy, the parties rather rigidly defended their own initial positions on the causes as well as the nature of the resolution of problems in the economic sphere of US-China relations.

In particular, the commentaries draw attention to the appearance of innovations in the claims made by J. Yellen to the interlocutors, which this time were expressed in the meme “about the overcapacity” of Chinese industry. Which, according to the guest, is associated with the destruction of the international trade system. These claims mainly concerned the production of electric cars, solar panels and modern electronics. For their part, their partners drew attention to the “politicisation” of bilateral economic relations by the US side.

Overall, the unprecedented length of the US Secretary of the Treasury’s visit to China is seen by commentators in both countries as important evidence that the lines of communication between the two countries remain open.

This, we would like to point out once again, becomes extremely important in conditions where, we repeat, the process of accumulating negativity in the sphere of political-strategic relations between Washington and Beijing continues. First of all, the increasing specificity of the former’s plans to create something similar to an “Asian NATO” in the Indo-Pacific region (which has been discussed since the beginning of the noughties) draws attention. The AUKUS configuration, which includes Australia, the United Kingdom and the United States, is likely to serve as a basis for the gradual realisation of such plans.

The first stage of its expansion could be the accession of Japan and the Philippines, which is increasingly being discussed on fairly robust information platforms. The upcoming US-Japan-Philippines summit in Washington fits into these plans. Kurt Campbell, who recently visited Tokyo and has just been appointed First Deputy Secretary of State of the United States, has been in charge of its preparation. The very fact of this appointment testifies to the organisation of the long-standing shift in the focus of US foreign policy interests from the Euro-Atlantic to the Indo-Pacific region.

Joint exercises in the South China Sea (where the situation is particularly tense) by the navies of all three countries plus Australia are timed to coincide with the above-mentioned summit. It is noteworthy that on the same day, it was announced that the People’s Liberation Army Navy and Air Force would be exercising in the South China Sea.

From 22 April to 8 May, another Balikatan combined military exercise Balikatan will take place in the Philippines and on islands in the same South China Sea, with the same composition of participants, joined by a French frigate. For the first time, 17,000 soldiers (mostly Americans) will be “defending” not the territorial waters of the Philippines, but the 200-mile zone of exclusive economic interests of that country.

The content of two other news items also clearly contradicts the intentions of making the military side of US-China relations ‘healthy’. First, it is reported that the level of control over the US military grouping in Japan and the degree of interaction between the two countries’ defence departments will be increased. Secondly, the commander of US ground forces in the Indo-Pacific region, General Ch. Flynn, in an interview with the Japanese press, announced plans to deploy medium-range missiles in the region.

It should be noted once again that the strategy under which Washington is sending directly contradictory signals to its main geopolitical opponent is called “managed competition”. It is designed to ensure the achievement of its own objectives without bringing relations with Beijing to the point of direct military conflict.

It should also be noted that this strategy is by no means a recent innovation, as it has been applied for more than 40 years (we note that it has been quite successful so far) to such a private component of relations with China as the Taiwan problem. Incidentally, in Taiwan, where the mutual manoeuvres of the two major world players on which its fate depends are followed with particular attention, this strategy has recently been defined by the term “crisis management”.

The term is widely used in business circles and accurately reflects the real policy of the US leadership in China. In this case, the term appeared in the commentary on the telephone conversation between the American president and the Chinese leader.

Although the problems with the “profile” plan were resolved during the US Secretary of the Treasury’s trip discussed here, it seems obvious that the event itself generally fits into the same strategy of “crisis management” that Washington is pursuing in its relations with Beijing.


Vladimir TEREKHOV, expert on the problems of the Asia-Pacific region, especially for the online magazine “New Eastern Outlook

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