US unhappy about China's tech pushback, rules out decoupling

When we sanction you, it's for national security. When you sanction us, that's just spiteful

US Treasury Secretary Janet Yellen has attempted to reset US/China relations, while also framing recent tech-related measures imposed by Beijing as inappropriate.

Yellen's comments came during a four-day trip to Beijing, in which she met with Premier Li, Vice Premier He, Finance Minister Liu, People's Bank of China deputy governor Pan Gongsheng, and other senior officials. She called the conversations "direct, substantive, and productive."

"Broadly speaking, I believe that my bilateral meetings – which totaled about 10 hours over two days – served as a step forward in our effort to put the US-China relationship on surer footing," Yellen said at a press conference over the weekend.

Yellen also assured the world that the US was not attempting to "decouple" from China, calling such action "destabilizing" for both nations and the global economy, and "virtually impossible to undertake."

"We seek to diversify, not to decouple," said Yellen at a roundtable discussion with US businesses operating in the Middle Kingdom on Friday.

Despite that reconciliatory language, Yellen said she was "particularly troubled" by "punitive actions" that have been taken against US firms in recent months and was concerned about new critical mineral export controls.

Last week, China imposed restrictions on gallium and germanium, substances that are essential for semiconductor manufacturing. The restrictions require anyone who wants to ship the materials abroad to apply for a permit with China's Ministry of Commerce.

The restrictions, which are seen by many as retaliatory for US measures and potential further actions that prevent Chinese access to technology, have global implications. The European Commission, South Korea, Japan and other governments and government organizations have scurried to determine the impact of China's move.

There are concerns that Beijing could expand on the bans to include more minerals, partly because China's former vice minister of commerce, Wei Jianguo, said it would.

Yellen's mention of "punitive actions" may also have been a reference to China's declaration that memory-maker Micron's products have unspecified security problems that make them unfit for use by operators of critical information infrastructure. Beijing announced Micron had failed a security review in late May and has not offered details in the seven weeks since.

During her visit, Yellen framed US tech sanctions against China as a matter of national security, and China's apparent reciprocal sanctions as a matter of spite.

The Treasury Secretary said she had made clear US actions are narrowly targeted.

"They are premised on straightforward national security considerations and not undertaken to gain economic advantage over China," added Yellen. Yellen said she was coordinating with US allies to respond to "China's unfair economic practices."

Meanwhile, Chinese state media called the talks between Vice Premier He and Yellen "constructive" but noted Beijing "expressed concerns over the sanctions and restrictions imposed by the United States on China." ®

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