Dialogue has all but broken down between the US and China, but a speech by the US Treasury secretary, Janet Yellen, has offered a way out of the impasse. Though Yellen last week reiterated the Biden administration’s position that national security will always trump economics, in both content and tone her speech marked a break from much of Washington’s more heated recent rhetoric.
In an interview with the Financial Times, the Treasury secretary underlined that the US was not trying to undermine China’s competitiveness, nor to constrain its development. “Economics are not a zero-sum game,” she said. That message, combined with her wish to visit China soon, should be taken as an olive branch by Beijing. It would be wise for Xi Jinping to treat Yellen’s outreach in the spirit that it was meant.
The auguries are not optimal. Joe Biden has been trying in vain to schedule a phone call with Xi, who has been meeting almost any other world leader who wants to see him. Recent visitors include France’s president Emmanuel Macron, Brazil’s president Luiz Inácio Lula da Silva, Germany’s foreign minister Annalena Baerbock, and senior officials from Iran and Saudi Arabia. Yet America’s overtures have been spurned.
Given heightened tensions across the Straits of Taiwan, and the stepped up US freedom of navigation patrols in the South China Sea, the lack of contact between Beijing and Washington is dangerous. Routine contacts have almost completely ceased since the US shot down a Chinese spy balloon off its Atlantic coast in February.
It is in both sides’ interests for that to change. Some in China will interpret Yellen’s speech as a mere reassertion of what Xi calls America’s strategy of “containment, encirclement and suppression”. She made clear the US would continually review, and potentially expand, its list of banned exports to China. These may go beyond the high-end semiconductors unveiled last October. She added that Washington would soon announce a list of prohibited outbound US investments to China. But the intent was constructive. Yellen made it clear that the US had no wish to decouple from China, which would be disastrous for both economies. Restoring dialogue was her goal.
Her speech also seemed designed to make it easier for European leaders to align with the US by echoing their own strategic analysis. This is an opportunity for de-escalation to which China should respond positively. A visit by Yellen, who is correctly perceived as a dovish voice within the Biden administration, would break the ice after months of silence. It would ease the way for the Chinese and US militaries to resume information exchange. It may also facilitate a follow-up visit by Antony Blinken, the US secretary of state, who cancelled his trip over the spy balloon incident. That, in turn, would prepare for another meeting between Xi and Biden after their brief November summit in Bali.
There are strong voices on both sides who are opposed to dialogue — hardliners around Xi, including likely Xi himself, and hawks in Washington. But talking is not a sign of weakness. If the US and China are indeed entering into a new cold war, they should take lessons from the original one. It took a hair-raising nuclear near miss over Cuba in 1962 to frighten both sides into establishing guardrails, including a hotline between leaders. The world should not have to wait for another version of the Cuban missile crisis for the US and China to put such safeguards in place.
The effort to resume dialogue has to start somewhere — and it has to start soon. The US needed to clarify its position and should continue to do so, but China ought now to respond.