China Should Welcome Yellen With Open Arms
Easing relations with the US is critical to improving sentiment among foreign and domestic investors.
Wielding a strong hand.
Photographer: Erika Goldring/Getty Images
Treasury Secretary Janet Yellen can expect a much warmer welcome in Beijing this week than Secretary of State Antony Blinken received not so long ago. China generally prefers to deal with US economic officials in the belief that they are pragmatic — and eager to cut deals in order to benefit from Chinese economic growth. This time, however, Chinese leaders should be the ones looking to strike a bargain.
When Yellen arrives in China, President Xi Jinping will hold a much weaker economic hand than he has in the past. Instead of enjoying a robust recovery after the end of his Covid Zero policy last December, the Chinese economy now seems stuck in neutral. Growth in the second quarter is likely to come in significantly below expectations: Manufacturing activities declined in both April and May while exports, which sustained the economy through the pandemic, also fell in May.