US Treasury Secretary Janet Yellen addresses an Atlantic Council Front Page event on April 13, 2022 in Washington, DC. Photo: AFP

US Treasury Secretary Janet Yellen will visit China later this week and is scheduled to talk about a series of macroeconomic and financial issues between the two countries, which is seen as a positive sign of stabilizing China-US relations following the recent visit by US Secretary of State Antony Blinken to Beijing. 

Both Chinese and American analysts believe that the two sides could make some improvements, even though the overall expectations for bilateral ties remain low, and it's crucial to keep communication channels open to avoid incidents from escalating into crises. 

As agreed between China and the US, Yellen will visit China from July 6 to 9, China's Ministry of Finance confirmed on Monday.

The US Treasury said Yellen will discuss with Chinese officials "the importance for our countries - as the world's two largest economies - to responsibly manage our relationship, communicate directly about areas of concern, and work together to address global challenges."

Yellen will be the second Cabinet-level member to travel to China in a month. Although the visit will mark another high-level engagement between the two countries, no significant breakthroughs are expected, CNN reported, citing a senior Treasury official. The US Treasury chief is expected to meet with senior Chinese officials and US companies, discussing "areas of concern," according to the media report. 

Wu Xinbo, director of the Center for American Studies at Fudan University, said at a panel discussion at the 11th World Peace Forum in Beijing on Monday that Yellen's visit should form part of the face-to-face discussions between the economic teams of the two countries. 

Currently, the economic teams of the two nations are still in the "early stages of contact," said Wu, who also anticipates that during Yellen's visit, both sides will focus on macroeconomic issues related to the Chinese, US and global economy. "And they may agree to establish a working mechanism to continue the dialogue."

China-US relations have reached a low point with growing tensions over issues ranging from trade and tariffs to tech rivalry. This was especially the case following former US House Speaker Nancy Pelosi's highly provocative visit to the island of Taiwan last August, and in response to the US provocations, China halted military and climate change talks with their US counterparts. 

Blinken's visit was considered an important one for relaunching the high-level engagement, and besides Yellen, John Kerry, the US President's special climate envoy, and Commerce Secretary Gina Raimondo also are expected to visit Beijing later this year, according to some US media reports. 

When asked about the possible visits of the senior US officials to China, Chinese Foreign Ministry spokesperson Wang Wenbin said China and the US have been communicating on dialogues and exchanges at all levels.

Things to cooperate on

"For China, our main concern is the tariffs imposed by the Trump administration. These tariffs have not been abolished to this day, and Biden has done nothing to reduce them," Wu said. 

China is also concerned about US' suppression in the technology sector, as there are still more than 1,000 Chinese entities on the US sanctions list. However, this issue is not within the purview of Yellen but falls under Raimondo, he said, noting that he hopes that Raimondo can visit China as soon as possible, at which point the two countries may have more substantive discussions on this issue.

Some experts also believed that Yellen may address the fiscal and financial issues between the two countries during her trip to China, for example, trying to persuade China to refrain from reducing its holdings of US Treasury bonds and instead increase them at the appropriate time to help the US address its inflation issues.

A window of opportunity in China-US relations has opened after US Secretary of State Blinken's visit to China. If Yellen also visits China in the near future, then the key issues for both sides to discuss would be the cancellation of the US' additional tariffs on China, the withdrawal of its "301 investigation" into China, and the review of the first phase of the China-US trade agreement, Zhu Min, former deputy governor of the People's Bank of China and former deputy managing director of the IMF, told the Global Times in a recent interview.

Zhu believes trade is the cornerstone of China-US economic relations, with the cancellation of additional tariffs on Chinese goods exported to the US being the first issue that needs to be discussed between the two sides.

While Chinese and US experts at the 11th World Peace Forum are keeping their expectations low for overall US-China relations, there could be some improvements despite the tense atmosphere. 

"It's possible that we can achieve small improvements in our bilateral relationship and in some international cooperation, but we should maintain strong restraints on our expectations, because the atmosphere in both countries is not good for broader kinds of achievements," Douglas H. Paal, distinguished fellow of the Asia Program at the Carnegie Endowment for International Peace, told the Global Times at the 11th World Peace Forum (WPF) on Monday. 

Paal believed that the two sides could still reach some agreements in practical fields such as increasing flights to facilitate people-to-people exchanges and working on trade barriers. 

On the suspension of military-to-military communication channels between the two countries, Paal also emphasized that the absence of good communication in the event of a crisis is bad for everybody. "So I hope we find a mechanism to improve that communication when it's needed."

Back on the right track 

A statement issued by the US Treasury on Yellen's trip to China also mentioned the three principles that the US Treasury chief laid out in an April speech guiding America's economic relationship with China, including securing national security interests, seeking a healthy economic relationship and seeking cooperation on urgent global challenges. 

Some experts told the Global Times on Monday that those principles are primarily aimed at safeguarding the national security of the US, which indicates that Yellen's visit to China still aligns with the Biden administration's overall and consistent China policy, and there are no signs of any relaxation in Washington's tough stance on China, which means it will be difficult for a fundamental adjustment in bilateral relations to emerge from Yellen's visit alone. 

Cui Tiankai, former Chinese ambassador to the US said at the WPF on Monday that he hoped the future direction of China-US relations will be beneficial to both countries and to the world.

To achieve this kind of relationship, both countries need to have a common political will, not a "win or lose" or "life-or-death" zero-sum mentality. The two countries can achieve this only when they reach consensus on goals and paths, he said. 

Addressing the recent "restart" of engagement between China and the US, Cui stated that recent high-level interactions between the two countries are a good thing. "It's better to sit down and talk than not to meet or talk," he said.