Yellen criticises China's 'punitive actions' against US companies

Treasury Secretary says Washington not seeking 'winner-take-all' approach towards competition

US Treasury Secretary Janet Yellen and Chinese Premier Li Qiang hold a meeting at the Great Hall of the People in Beijing. AP

Treasury Secretary Janet Yellen on Friday criticised recent action taken by China against US companies days after Beijing announced export controls on key materials for semiconductors.

“We are still evaluating the impact of these actions, but they remind us of the importance of building resilient and diversified supply chains,” she said in remarks at a US business roundtable in China.

Ms Yellen's trip is aimed at soothing relations between the two economic superpowers, but she arrived in Beijing under pressure to respond to China's recent export controls.

In separate remarks at a meeting with Chinese Premier Li Qiang, Ms Yellen said the US is not seeking a “winner-take-all” economic competition, but one that she said would include rules to benefit both countries.

China released a statement from Mr Li in which he called on the US to “meet China halfway”.

“China hopes the US will uphold a rational and pragmatic attitude, meet China halfway and push China-US relations back on track soon,” Mr Li said in a statement that did not mention export controls on semiconductor-related materials.

Ms Yellen also pushed back on suggestions that Washington is trying to decouple from Beijing.

“I have made clear that the United States does not seek a wholesale separation of our economies. We seek to diversify, not to decouple,” she said.

Her visit to Beijing is part of Washington's efforts at rapprochement with China after tension ratcheted up over the past 12 months.

Her visit follows Secretary of State Antony Blinken's trip last month, during which he and Chinese President Xi Jinping agreed to stabilise relations. But the US diplomat's visit was overshadowed by remarks from President Joe Biden comparing Mr Xi to “dictators”, which Beijing condemned.

US climate envoy John Kerry will be in China next week to resume climate talks. China pulled out of climate discussions last year in retaliation for then-House speaker Nancy Pelosi's visit to Taiwan, which Beijing called a breach of the “One China” principle.

While in China, Ms Yellen and Mr Li expressed hope for better communication between the two countries even though communications through military channels remain frozen.

“The United States will, in certain circumstances, need to pursue targeted actions to protect its national security. And we may disagree in these instances,” Ms Yellen said.

“However, we should not allow any disagreement to lead to misunderstandings that unnecessarily worsen our bilateral economic and financial relationship.”

During her meeting with Mr Li, Ms Yellen also discussed the importance of working together on global challenges such as debt distress and climate finance, the Treasury Department said.