US Treasury Secretary Janet Yellen sought to reassure Asian countries on Thursday that the US approach to China will not result in a ‘disastrous’ divide of the global economy, forcing them to choose sides.
Yellen said in a speech ahead of the Asia Pacific Economic Cooperation Summit in San Francisco later this month that a complete decoupling of the US and Chinese economies was “simply not practical,” especially given the complexity of Asian supply chains and the region’s deep economic ties to China.
Her comments sought to assuage growing concerns about geopolitical fragmentation of the global economy into U.S.-led and China-led factions as export and national security technology controls grow between the world’s two largest economies.
She reiterated that the U.S. is not seeking to decouple from China.
“A full separation of our economies, or an approach in which countries including those in the Indo-Pacific are forced to take sides, would have significant negative global repercussions,” Yellen said. “We have no interest in such a divided world and its disastrous effects.”
Yellen said the U.S. was pursuing the “de-risking and diversifying” of its economic ties to China, by investing in manufacturing at home and by strengthening linkages with allies and partners around the world, including Indo-Pacific countries.