US Yellen: "Resuming Economic Dialogue with China at the Appropriate Time"

[Asia Economy New York=Special Correspondent Joselgina] Janet Yellen, U.S. Treasury Secretary, stated that the United States and China will "resume economic dialogue at an appropriate time." She also confirmed that the U.S. plans to provide an additional $10 billion (approximately 13 trillion won) economic aid package to Ukraine ahead of the first anniversary of the Ukraine war.

On the 23rd (local time), according to economic media CNBC and others, Secretary Yellen made these remarks during her visit to Bengaluru, India, to attend the G20 Finance Ministers and Central Bank Governors meeting. She said, "I do not have a specific schedule in mind," but added, "I believe it is important to do so. We are open to dialogue (with China)."

Secretary Yellen emphasized that there are many areas where the U.S. and China need to cooperate to address global issues including food security, debt, and climate change. She also mentioned that smooth communication between the two countries is key to macroeconomic and financial conditions. Earlier, Secretary Yellen held talks with Chinese Vice Premier Liu He in Switzerland last month. She described the meeting as "constructive."

[Image source=Reuters Yonhap News]

These remarks attract attention as they come amid rising tensions between the two countries following the recent reconnaissance balloon shootdown incident, and as Russia, which invaded Ukraine, is showing close ties with China. The day before, Russian President Vladimir Putin warmly welcomed Wang Yi, China’s top diplomat and member of the Communist Party Central Political Bureau, who visited Moscow, expressing anticipation for a meeting with Chinese President Xi Jinping.

Secretary Yellen’s originally scheduled visit to China is also uncertain. Treasury officials were expected to visit China this month, but the plan was completely halted following the Chinese reconnaissance balloon issue. Prior to Yellen, U.S. Secretary of State Tony Blinken, who was to visit China, abruptly canceled his trip just hours before departure earlier this month citing the balloon issue.

Additionally, China has recently been selling U.S. Treasury bonds on a large scale. While this is partly due to portfolio reasons following a sharp rise in U.S. Treasury yields and a decline in bond prices, analysts suggest that the conflict between the two countries is also a major factor. According to the U.S. Treasury’s recently released data on its own Treasury holdings, China’s holdings as of the end of last year were $867 billion, a reduction of more than 16% compared to the previous year. According to Refinitiv, China’s holdings of U.S. Treasury bonds stand at $862.3 billion, the lowest level since May 2010.

On this day, Secretary Yellen also confirmed that an additional economic aid package for Ukraine is being prepared. She said that the U.S. has provided $46 billion in military, economic, and humanitarian aid to Ukraine so far, adding, "This has allowed Ukraine to maintain economic and fiscal stability despite its exceptional circumstances." The International Monetary Fund (IMF) projected in December last year that Ukraine would need at least $39.5 billion in external financial support this year.

The U.S. is also expected to impose even stronger economic sanctions against Russia, which invaded Ukraine, in the near future. Secretary Yellen evaluated that the sanctions against Russia have achieved meaningful results so far.

Furthermore, she stated that G20 countries must work hard to alleviate debt in underdeveloped countries, saying, "We will continue to pressure all creditors, including China, to engage in meaningful debt management for developing and emerging markets." The countries she mentioned as urgent, Zambia and Sri Lanka, are currently in a state of national default, with China being their largest creditor.

This content was produced with the assistance of AI translation services.