Janet Yellen Seeks to Woo China’s Neighbors Without Provoking Beijing
Treasury Secretary Janet Yellen is visiting two of China’s neighbors where she has pushed firms to move their operations—just a week after she reassured officials in Beijing that the U.S. wasn’t out to sever trade and investment ties. The trip to India and Vietnam underlines a central tension in the U.S.-China economic relationship: Yellen and the Biden administration must figure out how to promote alternatives to China without further upsetting relations with Beijing.
U.S. attempts to distance itself from China carry huge stakes for the world economy. Western officials worry they are too reliant on China for a host of critical exports , but they fear that a collapse in relations with the country could augur economic disaster.
India, where Yellen will attend a gathering of global economic officials from July 16-18, and Vietnam, where she will visit from July 20-21, have emerged as key beneficiaries of strains between the world’s two largest economies. Firms increasingly invest and produce there at the encouragement of Yellen and other U.S. officials.
While Yellen has cast these shifts as part of a narrow effort to create more diverse supply chains and protect national security, Chinese officials view the U.S. moves as an attempt to hold back their economy’s growth and development. U.S.
and Chinese officials agreed to keep talking after Yellen’s trip , a positive sign after relations plummeted over Taiwan, technology, the Ukraine war and a Chinese balloon. “It’s a thin line for Secretary Yellen to walk after the China trip," said Huong Le Thu, an adjunct fellow at the Center for Strategic and International Studies who studies southeast Asia. A senior Treasury official said Yellen’s calls for supply chain diversification
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