Treasury Secretary Janet Yellen reveals her 2024 US-China gameplan

Washington, D.C. (CNN) — Treasury Secretary Janet Yellen is on a mission to repair the fragile yet vital relationship between the United States and China. That mission will kick into high gear next year.

Yellen revealed her 2024 US-China gameplan in a major speech to business leaders on Thursday evening, detailing her 2024 priorities in improving US-China economic ties, which include improving communications between the world’s two largest economies, pushing Beijing for greater transparency, ramping up regulatory collaboration and tackling thorny issues like terror financing and the flow of fentanyl.

The remarks, which were delivered at the US-China Business Council’s 50th anniversary dinner in Washington, represent Yellen’s first description of her 2024 goals on the US-China economic relationship.

“We seek not to resolve all our disagreements nor avoid all shocks. This is in no way realistic,” Yellen said. “But we aim to make our communication resilient so that when we disagree, when shocks occur, we prevent misunderstanding from leading to escalation and causing harm.”

The US-China relationship, arguably the most important bilateral relationship on the planet, ends 2023 in a much better place than where it began. Relations hit a low point in February when US President Joe Biden ordered the shooting down of a Chinese spy balloon.

Yellen partially attributed the weakened relationship with China to the Trump administration’s “neglecting relationships with our partners and allies.”

“It damaged our global standing and meant significant missed economic opportunities for American firms and workers,” she said.

Still, Yellen acknowledged the US government “consistently” raised concerns that China engages in “unfair economic practices” that can harm American workers and firms.

Tensions have eased in recent months, which Yellen chalked up to a course correction by the Biden administration, paving the way for visits to China by senior US officials including Yellen and Secretary of State Antony Blinken and punctuated by last month’s four-hour meeting between Biden and Chinese leader Xi Jinping.

Now, US officials are hoping to build on that momentum.

In a sign they are satisfied with recent progress, Yellen is aiming to return to China during the first half of next year, a person familiar with the matter tells CNN. These plans to go back to China are still being decided, the source said.

“I plan to take my second trip to China as Treasury secretary,” Yellen said in Thursday’s speech.

In November, Yellen told reporters at a news conference following two days of meetings with Chinese Vice Premier He Lifeng that she looked forward to traveling to China at some point next year.

In her speech on Thursday, Yellen acknowledged that potholes still loom on the US-China front.

“We know that this relationship will face continued challenges. There are many areas on which the US and China strongly disagree,” Yellen said. “There is also always the risk of shocks that impact both of our countries.”

For instance, Yellen signaled that US officials remain committed to new limits on outbound investments to China and pressing China on national security concerns.

“Continuing to stabilize our relationship to prevent escalation won’t make news,” Yellen said. “But our economies, our people – and again, also economies and people around the world – will be safer and more secure.”

The speech comes just days after the House Select Committee on the Chinese Communist Party released a report outlining its bipartisan strategy to “fundamentally reset” America’s relationship with China.

“It embraces the clear reality that our current economic relationship with the People’s Republic of China needs to be reset in order to serve the economic and national security interests of the United States,” Republican Chairman Mike Gallagher and Democratic ranking member Raja Krishnamoorthi said in a statement on Tuesday.

Business leaders and global investors have been watching nervously as China grapples with a real estate crisis that slows its growth. The stakes are significant as China is the second-largest economy in the world and a key engine for global growth.

Yellen plans to push Beijing for better insight into how officials there will address these problems — especially if they worsen.

“Financial shocks in China – and China’s response to them – do not occur in isolation,” Yellen said. “Understanding China’s plans, especially how China intends to respond to challenges with local government debt and the real estate market or how it might react if unexpected weakness in its economy should arise, is crucial for those of us charged with policymaking in the United States.”

Recently, US officials and China have begun teaming up with meetings of working groups focused on the economy and financial markets.

Yellen touted the Treasury Department’s efforts to increase collaboration with China on climate and sovereign debt issues in developing countries.

Next year, the United States and China plan to facilitate exchanges between financial regulators, according to Yellen. That’s something US officials already do with the European Union and the United Kingdom.

“For economic policymakers responding to financial stress,” Yellen said, “it is critical to know the counterpart on the other end of the line and be able to make a quick call.”

This story has been updated with additional developments.

The-CNN-Wire
™ & © 2023 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.