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US-China cooperation in climate finance is ‘critical’, says Yellen

BEIJING (AFP) – Washington and Beijing should communicate “directly” on concerns about specific economic practices, United States (US) Treasury Secretary Janet Yellen said yesterday, urging greater cooperation between the world’s two biggest economies despite fraught ties.

In a meeting with Vice Premier He Lifeng yesterday, Yellen pointed to record bilateral trade last year as proof of just how intertwined they are. “There is ample room for our firms to engage in trade and investment,” she told He at the Diaoyutai state guesthouse.

“Where we have concerns about specific economic practices, we should and will communicate them directly.”

Vice Premier He responded that Beijing regretted that “unexpected incidents” had derailed efforts to improve China-US ties following a meeting between US Presidents Joe Biden and Xi Jinping in November last year.

“There were some problems in the implementation of the consensus reached by the two heads of state,” he said.

But following Yellen’s visit this week and her meeting with Premier Li Qiang on Friday, he added, “China will earnestly implement the consensus reached between you and Premier Li Qiang and turn it into concrete actions.”

Yellen has been keen throughout her visit to emphasise areas where the two powers need to work together – while also defending US moves to “de-risk” its economy from China, as well as tackling what Washington sees as unfair treatment of American businesses.

United States Treasury Secretary Janet Yellen shakes hands with Chinese Vice Premier He Lifeng. PHOTO: AFP

Yesterday, she told a roundtable of experts in China that collaboration between the two powers on climate financing was “critical”.

“As the world’s two largest emitters of greenhouse gases and the largest investors in renewable energy, we have both a joint responsibility – and ability – to lead the way,” Yellen said.

“Climate change is at the top of the list of global challenges, and the US and China must work together to address this existential threat,” she added.

Saying that “climate finance should be targeted efficiently and effectively”, she pressed China to support existing multilateral institutions like the Green Climate Fund, while urging for the inclusion of the private sector in transitioning towards net zero emissions.

“Both our economies seek to support partners in emerging markets and developing countries as they strive to meet their climate goals, and I believe continued US-China cooperation on climate finance is critical.”

Besides working together on climate, Yellen said in a Friday meeting with Chinese Premier Li that it was also key for Washington and Beijing to closely communicate on global economic and financial affairs while making joint efforts on international challenges such as debt distress.

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The Treasury chief’s high-level meeting with Li likely “set the tone” for the rest of her visit, said Lyu Xiang, a Sino-US relations expert at the Chinese Academy of Social Sciences.

Yesterday, besides meeting people involved in climate finance, Yellen also spoke with women economists, stressing that the US-China relationship was “rooted in the solid ties” between the American and Chinese people.

“It is important that we keep nurturing and deepening these ties,” especially as China reopens its economy after pandemic-related lockdowns, she said, adding that the US may have differences with the Chinese government, but not with its people.

Yellen is likely aiming to drill down into more specific issues, ranging from the macroeconomy to trade and technology exports, Lyu told AFP.

But a key question is whether “big ticket items that are in the category of global challenges”, like debt distress and climate cooperation, get bumped to the top of the agenda, said senior fellow Lindsay Gorman for emerging technologies at the German Marshall Fund of the US.

Yellen’s talks yesterday follow meetings with US companies. “Anything that can help make the US-China relationship better, number one, will help the companies here, the investment sentiment, and two, just give us more opportunity to cooperate,” President of the American Chamber of Commerce in China Michael Hart told AFP.

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