The Treasury secretary has conceded that protecting America’s national security may come at an economic cost
President Joe Biden will stop at nothing to protect America against security threats posed by China, even if the actions he must take damage his own nation’s economy, US Treasury Secretary Janet Yellen has claimed.
“National security is of paramount importance in our relationship with China,” Yellen said on Wednesday in a speech in Washington. She gave the example of blocking China from obtaining certain technologies, adding, “We will not compromise on these concerns, even when they force trade-offs with our economic interests.”
Yellen accused China of “unfair” economic practices and of “taking a more confrontational posture” toward the US and its allies in recent years. Washington has a “broad set of tools” to deal with security threats from China, she added, such as export controls and sanctions against entities that provide support to the People’s Liberation Army (PLA).
“The Treasury Department has sanctions authorities to address threats related to cybersecurity and China’s military-civil fusion,” Yellen said. “We also carefully review foreign investments in the United States for national security risks and take necessary actions to address any such risks. And we are considering a program to restrict certain US outbound investments in specific sensitive technologies with significant national security implications.”
The Biden administration has already taken steps to block Chinese companies from securing advanced semiconductor technologies, such as restricting exports of chip-making equipment. Yellen insisted that Washington doesn’t take such actions to gain an economic advantage or to stifle China’s growth and modernization.
Yellen also scolded China for alleged human rights abuses and alleged “no limits” support for Russia amid the Ukraine crisis. She warned that consequences would be severe if China provided material support or helped Russia evade sanctions, and she added that the US would use its “tools” to deter human rights abuses.
“Like national security, we will not compromise on the protection of human rights,” Yellen said. “This principle is foundational to how we engage with the world.”
Beijing has balked at US accusations, suggesting that Washington should “make more effort in solving its own human rights problems.” Chinese leaders also have faulted Washington for a “Cold War mentality” in which Beijing is demonized as a security threat as Biden’s administration tries to contain its economic progress.
“Containment and suppression will not make America great again, nor will it stop China from moving towards national rejuvenation,” Chinese Foreign Minister Qin Gang told reporters last month.
Yellen admitted earlier this week that Washington’s use of its leverage over the global financial system to sanction other countries could diminish the role of the US dollar as the world’s reserve currency. Asked about “weaponization” of the US currency, she told CNN that such tactics “could undermine the hegemony of the dollar.”