Yellen Plans July China Trip While US Preps Investment Curbs

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Yellen Plans July China Trip While US Preps Investment Curbs

(Bloomberg) -- US Treasury Secretary Janet Yellen plans to visit Beijing in early July for the first high-level economic talks with her new Chinese counterpart, people familiar with the scheduling said.

Her trip was long anticipated but was put off until “the appropriate time,” Yellen said in April. The people discussed the timing and purpose of the trip on condition of anonymity, because the details haven’t been officially announced.

In addition, a Biden administration executive order that would regulate and potentially cut off certain US investments in China is nearing completion and officials are aiming to have it ready as soon as late July, people familiar with the internal deliberations said.

The Treasury chief would be the second US cabinet official to travel to Beijing after relations between the world’s two biggest economies soured earlier this year. Secretary of State Antony Blinken just wrapped up his trip to China, where he met with his counterpart and also had a short audience with Chinese President Xi Jinping.

US and Chinese officials described the Blinken visit as productive and said the two sides had candid conversations on a range of issues.

An administration official said Monday that Yellen’s travel to China isn’t confirmed yet, while the executive order hasn’t been finalized and doesn’t yet have a timeline for issuance.

Vice Premier

In March, He Lifeng — a longtime confidant of Xi — became China’s vice premier responsible for economic policy, succeeding Liu He. That official is traditionally the counterpart to the US Treasury secretary. 

President Joe Biden is still due to speak with Xi, but a date hasn’t been set. Biden said last week he anticipates a meeting with the Chinese leader in the near future. The two met in Indonesia in November 2022 during the Group of 20 summit.

The Biden team for almost two years has been working on the executive order on US outbound investment in China, which would cover certain investments in semiconductors, artificial intelligence and quantum computing.

Work on the draft order has ramped up in recent weeks, with the goal of publishing it as soon as late July, though the timing could slip into August, people familiar with the discussions said. The final details are also still being worked out.

The White House briefed key allies on its approach at the Group of Seven summit in May, and all countries broadly endorsed the concept.

In an April speech on the US’s policy toward China, Yellen said that the US would pursue policies to defend and secure its national security and that they were not intended to hold China back.

Read More: Yellen Says China Security Worries Eclipse Economy Interests

“Even as our targeted actions may have economic impacts, they are motivated solely by our concerns about our security and values,” she said at Johns Hopkins University. “Our goal is not to use these tools to gain competitive economic advantage.”

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© Bloomberg. WASHINGTON, DC - JUNE 13: U.S. Treasury Secretary Janet Yellen testifies before the House Financial Services Committee at the Rayburn House Office Building on June 13, 2023 in Washington, DC. Yellen delivered her report on the state of the international financial system. (Photo by Kevin Dietsch/Getty Images)

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