Yellen tries to temper down US-China chips war in meeting with Premier Li

US Treasury Secretary Janet Yellen met Chinese Premier Li Qiang in Beijing on Friday and told him that the United States was not taking a "winner-take-all" approach and that it wants healthy competition with China.

Yellen, who is on a four-day visit to China, sought to temper down the tense relations between the two nations over trade curbs, human rights and a plethora of other disputes.

During her meeting with the Chinese premier, Yellen said, “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.”

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The comments come as US and China have been sparring over exports of chips after Beijing restricted the export of two metals required for manufacturing semiconductors, mostly used in electric vehicles, displays, and defence equipment.

This was in response to the Biden administration curbing exports of advanced chips to China. The US first imposed restrictions on exports of chips to China in 2015, extending them in 2021 and twice in 2022. The most recent restrictions were introduced inDecember.

Janet Yellen's high-stakes China visit

Yellen argued that the US was taking certain decisions “to pursue targeted actions to protect its national security”, adding that it should not derail ties.

“We may disagree in these instances,” she said.

“We should not allow any disagreement to lead to misunderstandings that needlessly worsen our bilateral economic and financial relationship.”

She further stressed that Washington was not seeking a “wholesale separation of our economies”.

“A decoupling of the world’s two largest economies would be destabilising for the global economy,”Yellentold a meeting with representatives of US business at a session hosted by the American Chamber of Commerce in the capital.

Yellen told Li that she hoped her visit would spur more regular channels of communication between the world’s two largest economies, adding that both countries had a duty to “show leadership” on global challenges such as climate change.

‘We can see a rainbow’

Before the meeting, Premier Li struck an optimistic telling Yellen that China see the relationship recovering after a difficult period.

"Yesterday, the moment you arrived at our airport and left the plane, we saw a rainbow," Li said.

"I think it can apply to the US-China relationship too... after experiencing a round of winds and rains, we surely can see a rainbow."

(With inputs from agencies)