US Treasury Secretary Janet Yellen believes that decoupling the Chinese and US economies is neither desirable nor possible. During a visit to Beijing today (local time), he said that “cutting off the world’s two largest economies would destabilize the global economy”. “That’s practically impossible.”
In recent months, the U.S. has begun restricting China’s access to what Washington considers particularly critical technologies. This approach has been dubbed “de-risking”: dependencies on the world’s second-largest economy and the resulting security risks should be reduced. “We want to diversify, not divest,” Yellen said now.
The Chinese government announced on Monday that it would restrict exports of gallium and germanium, essential for chip production, from early August. The move was seen as a reaction to US restrictions on semiconductor exports to China, although Beijing had said ahead of Yellen’s visit that it was “not targeting any country”.
However, the US Treasury Secretary expressed “concern” in discussions with US businessmen in China. “We are still evaluating the impact of these actions, but they remind us of the importance of building resilient and diversified supply chains.”
Yellen arrived in the People’s Republic yesterday on a four-day visit. According to official information, many issues are on the agenda, including the state of the global economy, climate change and the debt burden of poor countries.
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