An uphill start to Janet Yellen’s mission to China, her first as secretary to the Treasury. In fact, Beijing has announced that from August 1 it will limit exports of products and materials containing gallium and germanium, which are rare and vital metals for semiconductors, 5G network stations and solar panels, in order to “safeguard the security and national interests,” China’s commerce ministry said. A move that has all the flavor of retaliation for US restrictions on the sale of high-end chips and equipment for their production. And to be used as leverage in future negotiations between the two countries.
In her four-day trip, from Thursday to Sunday, Yellen will meet with senior Chinese executives and American companies operating in the country. The fact that he is leaving is already a good sign, despite the announced Chinese crackdown on rare metals: his mission comes a few days after Joe Biden, while trying to re-establish stable relations with China, called Xi “a dictator” , without backing down or apologizing as requested by the Dragon authorities. An outburst that has rekindled tensions and which risked freezing relations between the two superpowers again. Beijing has made pragmatism prevail, understanding that the commander in chief is in an electoral campaign and has to deal with the Republican hawks, but still wanted to respond to the tech challenge.
Yellen was leading the Fed
Yellen’s mission should be followed by that of the Secretary of Commerce Gina Raimondo. The resumption of dialogue should then be sealed by a bilateral agreement between Biden and Xi, on the sidelines of the G20 in India in September or the APEC summit in San Francisco in November. The Treasury secretary, who has known China well since she led the Fed, is seen as a friendlier counterpart to other members of the Biden government. So much so that in the past you too have advocated a relaxation of American tariffs, even if you then had to adapt to the hard line. But her tone remains soft, in the belief that the relationship between Washington and Beijing is “important for the whole world”.