Treasury Secretary Janet L. Yellen visited China. There she tried to press the worlds biggest economy on several issues.

• Yellen, in Beijing, Criticizes China’s Treatment of U.S. Companies – NY Times, July 7, 2023
• Yellen Urges China to Step Up Climate Finance Investments – NY Times, July 7, 2023
• U.S. Raises Pressure on China to Combat Global Fentanyl Crisis – NY Times, July 7, 2023

None of these points are in China’s interest. In the U.S. Chinese companies are treated badly. U.S. financed climate investments in foreign countries, which are small, usually come with additional extraordinary demands that benefit the donating country rather than the receiving one. China does this differently. Fentanyl is not a global problem rather a specific U.S. one the causes of which are general social problems China and other have avoided to have.

The last demand Yellen made was even more crazy. She called for a full turn of China towards neoliberal policies:

“I pressed them on our concerns about China’s unfair economic practices,” [Yellen] said, citing barriers to access for foreign firms and problems involving intellectual property. She added that a more market-oriented system in China “would not only be in the interests of the U.S. and other countries. It would be better for the Chinese economy, as well.”

Would China be where it is today if it had privatized its banking system and state owned companies? Would China be richer if it had let U.S. vulture funds buy up and bankrupt Chinese companies? Would it have managed to lift 800 million of its citizens from poverty if it had followed the economic advice of the U.S., the IMF or World Bank?

The answer to these questions is of course an emphatic “No”.

Why Yellen thinks she can impress China with advice for a ‘more market-oriented system’, even as the U.S. blocks Chinese investments, sanctions Chinese companies and limits sales of certain products to China, is beyond me.

Yellen’s visit failed to achieve anything. She had some talks with Chinese officials but achieved nothing. She lectured and made demands that no one in China will be willing to fulfill.

The Chinese side for one seems unimpressed by her performance:

Yellen mentioned multiple times the US is seeking a healthy competition with China rather than a “winner-take-all” approach. While this may sound good, the key lies in how we define “healthy competition.” Is it a US-style one in which the geopolitical appetite of the US is satisfied while China unconditionally cooperates? Or is it based on mutual respect, peaceful coexistence, and win-win cooperation? The root cause of the challenges in the China-US relationship lies in Washington’s flawed perception of China. Unless the issue of the ‘first button’ is addressed, no matter how wonderful the ideas and wishes may be, they will remain nothing more than castles in the air.

Unless the U.S. accepts China as equal the relations between the countries will not turn around. The U.S. can grow with China only when it accepts that China is different from itself and has its own path towards further development.

As neither is the today’s dominant viewpoint a further deterioration of the relations, largely to the disadvantage of the U.S., is the most likely prospect.

Reprinted with permission from Moon of Alabama.