Yellen to visit China this week

Treasury Secretary Janet Yellen plans to visit China this week, the next step in the Biden administration’s efforts to improve relations between the world’s two biggest economies.

Why it matters: Yellen's trip, initially announced in January, was put on hold after President Biden ordered the military to shoot down a Chinese spy balloon after it flew across the U.S. in February.

• Secretary of State Antony Blinken traveled to China earlier this month to meet with his counterpart as well as President Xi Jinping for what Blinken called a “robust conversation."

Driving the news: Yellen will visit Beijing July 6-9 and meet with senior officials in China, where she plans to give a face-to-face version of her speech in April that laid out the three principles guiding America’s economic relationship with Beijing.

• She isn't scheduled to sit down with Xi, a senior treasury official said.
• Yellen does plan to raise concerns about Beijing's economic coercion while also explaining the Biden administration's expected executive order in outbound investment, the official said.
• "My hope in traveling to China is to reestablish contact," she said in an MSNBC interview last week, before the trip was announced. "There are a new group of leaders, we need to get to know one another."

Between the lines: Yellen has used previous meetings with Chinese officials to get a real-time readout of China's economy and discuss ways both countries can cooperate on shared challenges such as climate change and global growth.

Zoom out: After two difficult years in the U.S.-China relationship at the start of his presidency, Biden sought a new path at the G20 summit in Bali last November. But plans to improve the relationship were essentially frozen after the balloon incident.

• Blinken had constructive meetings in Beijing, but the two sides didn't agree to re-establish military-to-military contact. The relationship hit another bump last week when Biden called Xi a "dictator" at a fundraiser in California.

• The Chinese embassy in Washington, D.C., issued a strong protest, but Biden dismissed the significance of his remarks, telling reporters: "I don’t think it’s had any real consequence."
• He said he will meet with Xi "in the near term."

Zoom in: The Biden administration has taken an aggressive approach in protecting critical technologies from Chinese companies, and in October imposed export controls on semiconductors.

• Officials are putting the finishing touches to an executive order to restrict outdoing investment into China's chip, quantum computing and artificial intelligence industries.

The bottom line: Officials don't expect Yellen's trip to resolve — or even address — all the thorny issues dividing the two countries.

• But administration officials want to improve the lines of communication on economic issues.