The U.S.-China relationship can only move forward with direct and open communication, Yellen told Li, after arriving in the Chinese capital from the southern city of Guangzhou.
“The meeting was frank and productive and builds on progress made by President Biden and President Xi at the Woodside Summit last November to deepen bilateral discussions,” a readout from the Treasury Department said, adding that Yellen discussed a level playing field for both American and Chinese workers and business as well as the impacts of Chinese industrial overcapacity on American workers and firms.
Overcapacity refers to a situation where Chinese government support to industries fuels production capacity but risks a surge of exports at depressed prices to the global market, undercutting international competitors.
Tatan Syuflana / AP
“As the world’s two largest economies, we have a duty to our own countries and to the world to responsibly manage our complex relationship and to cooperate and show leadership on addressing pressing global challenges,” Yellen said. “I have returned to China at President Biden’s direction following the Woodside Summit to build on the foundation that we have laid.”
Li, in welcoming Yellen, said “China sincerely hopes that the two countries will be partners, not adversaries”.
He added that Chinese internet users have closely followed the details of her trip since her appearance in Guangzhou, showing “expectation and hope for the China-US relationship to continue to improve”.
In Guangzhou, Yellen had a series of meetings including hours of discussions with her counterpart, Vice Premier He Lifeng.
Washington is especially concerned about this phenomenon in new industries such as electric vehicles and solar energy.
Yellen’s trip marks her second visit to China in less than a year.
“While we have more to do, I believe that, over the past year, we have put our bilateral relationship on more stable footing,” she said in opening remarks to Premier Li as she begins two days of high-level talks in Beijing.
Rather than ignoring differences, this has meant “understanding that we can only make progress if we directly and openly communicate with one another”, the Treasury chief said.