Striking a Balance: Yellen Vows to Protect US Interests Amidst China's Rising Espionage Threats
Highlights of the State Visit to Beijing
US Treasury Secretary Janet Yellen, following her diplomatic mission to Beijing, has asserted that the United States will secure its own "national security" interests in the face of China's newly enacted espionage law and export controls on vital tech industry minerals. These Chinese actions pose growing threats to American firms operating in China.
Implemented on July 1, China's new counterespionage law expands the powers of the Chinese Communist Party (CCP) government. It raises the stakes for American businesses in China, with increased risk of office raids, phone searches, and prohibitive exit bans under the law's broadened provisions.
Before her departure from Beijing, Yellen addressed these concerns during a conversation with CBS host Margaret Brennan. Yellen had been alerted to instances of Chinese authorities intimidating American firms, such as Capvision, Bain & Co., Mintz Group, among others, as reported by US Ambassador to China, Nick Burns.
This intimidation issue, Yellen highlighted, was one of the concerns she brought to the attention of Chinese officials, including Premier Li Qiang, Vice Premier He Lifeng, and others, during her approximately 10-hour long series of meetings.
In her interview with Brennan for CBS’s "Face the Nation," Yellen shared, "I had the chance to meet with American businesses and to hear about their concerns... and certainly in my meetings, that is a concern that I raised."
However, she also emphasized the importance of maintaining healthy economic relations with China. American firms saw "enormous opportunities" in China, a situation she suggested should be mutually beneficial to both American and Chinese businesses and workers.
Brennan further questioned Yellen on President Biden’s potential executive order restricting US exports of computer chips linked to artificial technology and cloud computing. This query arose against the backdrop of Beijing's recent announcement of controls on exports of gallium and germanium, niche metals crucial to high-tech industries such as semiconductor and solar panel production.
Yellen highlighted the non-negotiability of national security, stating, "An objective of my trip was to explain that national security is something that we can't compromise about, and we will protect, and we will do so even if it harms our own narrow economic interests." She assured transparency, narrow targeting, and clear explanations in any such actions, which might impact the Chinese economy.
In her conversations with Chinese counterparts, Yellen noted that China also protected its national security through export controls and other means. She mentioned President Biden's examination of potential controls on outbound investment in specific high technology areas. If implemented, these measures would be narrowly targeted and should not significantly impact the investment climate between the two countries.
While acknowledging that Chinese export controls could be interpreted as retaliatory, Yellen emphasized that no final decision has been made by the Biden administration regarding an executive order related to American investment in China.
Yellen stressed the importance of both nations not engaging in a series of unintended escalatory actions that could damage their overall economic relationship. Her key message: While protecting national security interests, it's critical to strive for a balanced approach that maintains a healthy economic relationship with China.