The Treasury broadly trumpets a visit to China by Janet Yellen shortly after the US July 4 Independence Day holiday. Is the timing intentional?
The first emailed media advisory was sent Monday after which a second readout drifted in early this morning.
In the initial message, the US government indicated that the Secretary of the Treasury, Janet Yellen, would be traveling to Beijing later this week to meet with senior Chinese officials, arriving there on the sixth and staying there until the ninth.
In the subsequent message, the government stated that Yellen had met with the Chinese ambassador to US, Xie Feng.
Unusual Visit
The visit, which appears highly choreographed, also points to a rather unusual flurry of activity just before and after the American 4th of July Independence Day holidays.
It takes place a little more than two weeks after a trip by Secretary of State Anthony Blinken where one of his main overtures, improved communications between the militaries of both countries, was rebuffed, as reported by the «Associated Press» (English, freely available).
Only a day later, US President Joe Biden seemed to undercut any goodwill from that meeting by calling China’s president, Xi Jinping, a dictator at a fundraiser in California, a comment that was quickly rebuffed on the mainland.
Up and Down
Right now, everyone in the finance industry has the right to feel confused with all this tit-for-tat 21st-century hyper-realpolitik. Between semiconductor bans, raw material embargoes, sanctions, spy balloons, meetings in Bali, G-7 pronouncements, decoupling, de-risking, and freedom of navigation exercises, it is hard to see the forest for the trees.
When it comes to the fraught geopolitical relations between the world’s largest and second-largest economies there is just too much up in the air right now. One day things are up and the next they are down.
Given that, let’s take a step back and look at what Yellen seems to be going to China to achieve. The first message by the Treasury on Monday links her visit to November’s Bali meeting when Biden last met Xi.
Guiding Principles
So far so good. It then discussed a responsibility to manage the relationship between both countries while communicating directly about areas of concern and working together to address global challenges.
Then the message drifted into what has become standard boilerplate in the meantime, referencing Yellen’s speech from April that reiterated national security interests and human rights in the context of resetting a healthy economic relationship between the two countries.
The post-mortem of the meeting with the Chinese ambassador was delivered to email inboxes at a very auspicious time for regional media, given it came in shortly after 8:00 AM this morning.
Bilateral Management
In it, Yellen was reported as having a «frank and productive» discussion aimed at improving communications and «responsibly» managing the bilateral relationship.
Still, with all the activity, the US risks almost appearing acquiescent with these regular visits - and it is hard to fathom what they are trying to do if fundamental views have not changed. Meeting with the Chinese ambassador in Washington would likely have been enough it really was just about communication and whatnot.
Maybe the US senses China’s potential disenchantment with its Russian ally related to what has become a very prolonged and deadly conflict in Ukraine and they are trying to take advantage of that. But, in truth, with any imagination, we could speculate all day about the potential rationales.
Friendly Relations
On the other hand, in China, something slightly odd is also afoot. «Xinhua», the official state news agency, ran a somewhat surprising piece on the 1st of July.
In clear English, it served up a chronology of Xi Jinping’s efforts to establish friendly relations with individual Americans going back to his days as Secretary of the Fuzhou Municipal Committee all the way to ostensible friendships with Starbucks founder Howard Schultz and Bill Gates, who met with the Chinese President in June.
If both countries had planned this out in advance, one would have to say that the choreography appears to be remarkably sophisticated and well-timed, at least to the unknowing outside observer.
Possible Meeting
But the proof as to whether ties are warming or not will lie in whether Yellen meets Xi Jinping instead of a coterie of senior officials, which is the first hurdle everyone will be watching.
A second hurdle, and one that the media is likely to focus closely on, is whether her meeting ends up being shorter or longer than the 35 minutes that Blinken got.
If I was still a banker, I would probably keep to that old market adage «sell in May and go away». Even though we are now in July, staying on the sidelines is probably a wise place to be until we know for sure things are warming up between both countries.
