US Treasury Secretary Janet Yellen struck a positive but pragmatic tone after completing a high-stakes trip to China that aimed to reassure officials the US isn’t trying to hold back its biggest economic rival.
Ms Yellen’s comments were delivered at a press conference capping a four-day visit to Beijing that she described as a mission to revive engagement between the two largest economies. Frictions between Washington and Beijing have tumbled into a tit-for-tat trade war that has seen both sides restrict exports critical to advanced technologies.
The US Treasury chief emphasised the benefits of trade with China and said she stressed to officials in Beijing that “diversifying” supply chains in narrow areas wasn’t the same as decoupling.
“This is something I am trying to communicate and believe very strongly myself,” she said. “I think that message was received.”
While in China, Ms Yellen held 10 hours of talks that she described as “direct, substantive and productive”, and said had brought US-China ties closer to a “surer footing”.
Half of that time was spent with her counterpart Vice Premier He Lifeng, the first extensive exchange between the two policy chiefs since China’s new economic team was appointed. During a shorter meeting with Premier Li Qiang, she had a broader exchange on the US-China relationship.
Ms Yellen sought to air concerns about Chinese economic policies while calling for greater co-operation and engagement between the two nations, especially on global challenges such as climate change and debt distress in poorer nations.
It was the first major test of a policy geared towards defending and securing US national security without trying to hold China back economically. The policy was first outlined in April.
During her trip, Ms Yellen raised China’s “non-market” practices and “coercive actions” against American companies and warned Chinese firms against providing material support for Russia’s war in Ukraine. China expressed its concerns about US sanctions and restrictive measures.
Despite those pressure points, Ms Yellen’s overall message was for both sides to manage their rivalry with a fair set of rules.
“President Biden and I do not see the relationship between the US and China through the frame of great power conflict,” she said on Sunday. “We believe the world is big enough for both of our countries to thrive.”
President Biden and I do not see the relationship between the US and China through the frame of great power conflict. We believe the world is big enough for both of our countries to thrive
US Treasury Secretary Janet Yellen
Ms Yellen’s visit was part of a broader push by President Joe Biden’s administration to mend relations with America’s main geopolitical rival, while also sending clear messages about US policy.
During her visit, she met with Pan Gongsheng, who is expected to take over as governor of China’s central bank, as well as her former counterpart Liu He – a fluent English-speaking veteran of the international stage who has a rapport with Ms Yellen.
Ms Yellen is the second member of Mr Biden’s cabinet to visit China in three weeks, after Secretary of State Antony Blinken’s visit in June.
Ms Yellen’s efforts to narrow the scope of de-risking and identify “unproblematic” trade opportunities in China contrasted with Mr Blinken’s more combative tone. The top US diplomat said in Beijing that the US would seek to protect “our critical technologies so that they aren’t used against us”.
US Climate Envoy John Kerry is expected to visit later this month for talks on global warming, an area of mutual concern where Beijing and Washington could also find more common ground.
The relationship’s next test may come soon. Mr Biden’s team is preparing an executive order curbing US outbound investment in China that could further restrict China’s access to advanced technology.
Ms Yellen said “no final decisions” had been reached on that action but pledged any new restrictions would be “highly targeted” towards a few sectors. “I wanted to allay their fears that we would do something that would have broad-based impacts on the Chinese economy,” she added, referring to her counterparts in Beijing.
Vice Premier He warned the US on Saturday that “generalising national security” was not conducive to economic exchanges, according to a readout published by the official Xinhua News Agency.
Treasury officials said stressed that Ms Yellen’s primary objective in Beijing was to build communication channels with the Chinese government’s new economic team. On Sunday, Ms Yellen said the meetings she’d had in Beijing gave her confidence more talks could be achieved.
“We will have more frequent and regular communication and there will be benefits that come from that,” she said.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
ETFs explained
Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.
ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.
There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
Bundesliga fixtures
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
Arabian Gulf Cup FINAL
Al Nasr 2
(Negredo 1, Tozo 50)
Shabab Al Ahli 1
(Jaber 13)
Winners
Ballon d’Or (Men’s)
Ousmane Dembélé (Paris Saint-Germain / France)
Ballon d’Or Féminin (Women’s)
Aitana Bonmatí (Barcelona / Spain)
Kopa Trophy (Best player under 21 – Men’s)
Lamine Yamal (Barcelona / Spain)
Best Young Women’s Player
Vicky López (Barcelona / Spain)
Yashin Trophy (Best Goalkeeper – Men’s)
Gianluigi Donnarumma (Paris Saint-Germain and Manchester City / Italy)
Best Women’s Goalkeeper
Hannah Hampton (England / Aston Villa and Chelsea)
Men’s Coach of the Year
Luis Enrique (Paris Saint-Germain)
Women’s Coach of the Year
Sarina Wiegman (England)
Pathaan
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COMPANY%20PROFILE
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The years Ramadan fell in May
Turkish Ladies
Various artists, Sony Music Turkey
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
