Nov 2, 2023 - Politics & Policy

Scoop: Yellen will use speech to set stage for Biden-Xi meeting

Photo: Drew Angerer/Getty Images

The Biden administration is using a Thursday speech by Treasury Secretary Janet Yellen to set the stage for President Biden's APEC summit and his highly-anticipated meeting with Chinese President Xi Jinping later this month.

Why it matters: Team Biden wants China's neighbors — and China — to know that "economic ties" will underpin its approach to the Indo-Pacific region, as it looks to diversify U.S. supply chains with partners and allies.

  • Biden officials want pragmatism to be the predicate for the U.S- China relationship.
  • By emphasizing the importance of economic growth and trade, officials are signaling to Beijing that relations don't have to be defined by conflict.
  • At the same time, the White House wants to convince other Indo-Pacific countries that the U.S. is committed to long-term partnerships with them, as Biden works to expand U.S. supply chains and reduce its reliance on China.

What they're saying: "Claims that America is turning away from the Indo-Pacific are wholly unfounded," Yellen will say in an address to the Asia Society in D.C.

  • "We are deepening our economic ties across the region," she will say, according to remarks obtained by Axios.
  • "We're pursuing an approach I've called friendshoring -- seeking to strengthen our economic resilience through diversifying our supply chains across a wide range of trusted allies and partners."

Driving the news: The Biden administration is carefully calibrating its message ahead of Biden's first meeting with Xi — set for the sidelines of the Asia Pacific Economic Conference in San Francisco — since November of 2022.

  • Central to that approach: clear lines of communication, which were strained for Biden's first two years and then went basically silent after the Chinese spy balloon incident earlier this year.
  • Over the summer, a trio of Cabinet visits to Beijing helped to mend fences. A reciprocal visit to D.C. by China's Foreign Minister Wang Yi last week allowed both sides to lock in the Xi visit to San Francisco.

By the numbers: Trade between the U.S. and the Indo-Pacific region has increased over 25% since just 2019, Yellen will say.

  • In 2022, trade reached $2.28 trillion, with the U.S. exporting about $770 billion to the region in goods and services.

Zoom out: Even when the Biden administration has unveiled unfriendly policies towards China – like its restriction of outbound investment to the tech industry – officials have taken pains to explain that harming China isn't the intent.

  • The goal is simply to ensure that the U.S. retains a military advantage over China in crucial technologies, like artificial intelligence and quantum computing.
  • And Biden has been clear that he wants to continue to trade with China.
  • "We're not looking to decouple from China, we're looking to de-risk and diversify our relationship with China," Biden said at the end of the G-7 summit in May in Japan.

The bottom line: Biden's China policy doesn't solely exist in the economic sphere.

  • From the start of the administration the president has bolstered the so-called Quad – a security conference between Australia, India, Japan and the U.S.
  • And at last week's state dinner, he celebrated the U.S. alliance with Australia, a country that he's entrusted with America's most sensitive nuclear submarine technology.
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