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Treasury Secretary Janet Yellen on the economic relationship of the U.S. and China


What exactly does a healthy economic relationship look like between the world's top two economies? Well, that's one key question that President Biden and Chinese leader Xi Jinping will discuss when they meet privately tomorrow. They're both attending the Asia-Pacific Economic Cooperation summit in San Francisco this week. Biden has cast the relationship between the U.S. and China as one of stiff competition but doesn't want that to tip into conflict. Last week in San Francisco, U.S. Treasury Secretary Janet Yellen met again with her counterpart in the Chinese government to help lay the groundwork for this week's meeting. Secretary Yellen joins us now to talk more about that. Welcome to ALL THINGS CONSIDERED.

JANET YELLEN: Thank you for inviting me.

CHANG: So I know that last week both countries pledged not to what's called decouple their two economies. But the U.S. does want to de-risk the relationship. What does de-risk mean to you in the plainest terms?

YELLEN: Well, let me just start by saying that we have a deep economic relationship. We have healthy competition. And we think we both gain from trade and investment that takes place, although it really needs to be on a level playing field so that it's fair to American workers. But de-risk means that we should have supply chains that are diversified. We saw during the pandemic and then later when Russia invaded Ukraine, that having too much concentration of one's suppliers can lead to problems, and that it's better for our economy to have more diversified supply chains.

In the case of China, there are areas, particularly in the area of clean energy - wind, solar, electric batteries, the minerals that go into them - that we're highly dependent - overly dependent on China. And we want to diversify through a process I've referred to is friend-shoring. So, of course, we want to do some things ourself in the United States, but we want to continue to trade but rely on a broader set of trusted trade partners. And we're meeting here in San Francisco, the Asia-Pacific Economic Conference.

CHANG: Right.

YELLEN: And we have a broad range of...

CHANG: Well, let me...

YELLEN: ...Trade partners...

CHANG: Let me...

YELLEN: ...That we're working with.

CHANG: Let me talk about cultivating trust among those trusted partners. I know that the Biden administration has made some moves in the name of national security that China takes issue with. Like, I'm talking about restrictions on U.S. investment in certain Chinese tech sectors, prohibiting the export of certain tech goods to China, tariffs on imported Chinese goods, sanctions on Chinese firms. How do you explain those decisions to Chinese leaders when they are accusing the U.S. of trying to stifle their economic growth?

YELLEN: Well, I think that's a very important issue. And I made clear in my conversations with my counterpart, Vice Premier He, that we are not trying to stifle China's economic progress. And as the president and I have both said, we think greater income and growth in China is good for the globe and good for the United States as well. But we will take actions to protect our national security. And when we do that, we will try to target them narrowly so that we're not imposing broad harm...

CHANG: Right.

YELLEN: ...On China's economy.


YELLEN: We have...

CHANG: So if I may, in the last minute we have left - so then what are areas of economic cooperation that China and the U.S. have agreed upon?

YELLEN: That's very important. We realize that for the sake of the globe, we need to work together. We've agreed to do that with respect to economic growth, the impact of our economies on the entire global outlook, financial stability, regulatory issues, climate and debt problems in low-income countries. Those are all areas we've agreed to work together on.

CHANG: That is Treasury Secretary Janet Yellen. Thank you so much for joining us again.

YELLEN: Thank you. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Ailsa Chang is an award-winning journalist who hosts All Things Considered along with Ari Shapiro, Audie Cornish, and Mary Louise Kelly. She landed in public radio after practicing law for a few years.