US Treasury Secretary Janet Yellen told US businesses operating in China she is “concerned about new export controls recently announced by China” on gallium and germanium minerals used in semiconductors.
In her first public remarks on a four-day trip to China she met with the business leaders in a roundtable to discuss her concern, adding that the US is “still evaluating the impact” of China’s new export controls announced July 3 and set to take effect Aug. 1. “They remind us of the importance of building resilient and diversified supply chains,” she said. (Her full remarks prepared for delivery are onllne. )
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Yellen also said she was “particularly troubled by punitive actions that have been taken against US firms in recent months” without specifying particular companies. In May, China banned operators of critical infrastructure from buying from US-based Micron after finding it had failed a security review that found Micron products “have relatively serious potential network security issues,” according to a translation of a China Netcom report.
Later, memory maker Micron warned in June of a “significant headwind” slowing the company’s recovery from China’s Cyberspace Administration decision.
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In recent months, Chinese officials have objected to actions by the US limiting China’s access to advanced tech, including export controls that took effect in October to limit the ability of US companies to sell advanced chips and chipmaking gear to China.
Yellen also took a mildly conciliatory tone in her remarks, noting again that the US seeks “healthy economic competition with China.” Then adding, “But healthy economic competition—where both sides benefit—is only sustainable if that competition is fair.”
She continued: “Our economic relationship with China must work for American workers and businesses. I will always champion your interests and work to make sure there is a level playing field. This includes coordinating with our allies to respond to China’s unfair economic practices.”
Yellen’s primary mission on the trip is to meet with senior officials representing the People’s Republic of China. President Biden met with President Xi in Bali last November. According to Treasury officials Yellen is expected to meet with PRC officials to discuss the importance for world’s two largest economies to responsibly manage their relationship and communicate directly about areas of concern.
In a speech she delivered in April Yellen outllined guiding principles for the US economic relationship with PRC, including securing US security interests and protecting human rights. Also, the US seeks a healthy economic relationship with China to foster “mutually beneficial growth and innovation and expands economic opportunity for American workers and business,” she said at the time.
Meeting on Friday with Preimier Li Qiang, China’s No. 2 leader, Yellen said Washington and Beijing must cooperate on matters than affect the entire world and appealed for “regular channels of communication.”
She added, “we should not allow any disagreement to lead to misunderstanding that unnecessarily worsens our bilateral economic and financial relationship.”
“We seek healthy economic competition that is not winner-take-all, but that, with a fair set of rules, can benefit both countries over time,” Yellen also said during the meeting with Premier Li Qiang on Friday. “The United States will, in certain circumstances, need to pursue targeted actions to protect its national security, and we may disagree [with China] in these instances.
