Biden Admin Briefed Xi on Watered-Down Chinese Investment Limits

Treasury Secretary Janet Yellen didn't want to catch China 'off guard,' report says

U.S. Treasury secretary Janet Yellen and Chinese vice premier He Lifeng (Mark Schiefelbein/Pool via REUTERS)
July 18, 2023

The Biden administration during a trip to Beijing briefed Chinese president Xi Jinping's government on watered-down U.S. plans to restrict investments in China so as not to catch Xi "off guard," according to a new report.

Treasury Secretary Janet Yellen during her July trip to China "previewed" to Xi's government the administration's plans to limit investment into certain Chinese sectors, Bloomberg reported Monday evening. "The goal, in part, was to make sure it doesn't catch off guard America's biggest geopolitical rival," according to the outlet.

The revelation marks the latest example of Yellen's attempts to appease the Chinese while in Beijing. Beyond briefing Xi's government on the planned investment restrictions, Yellen declined to use tough-on-China language that has angered the Chinese Communist Party. The Treasury secretary refused during her trip to say that the Biden administration is working to "decouple" or "de-risk" from China's economy, instead arguing that the United States merely wants "diverse" supply chains. Yellen hoped that language would "allay China's concerns," according to the New York Times.

While China's Foreign Ministry on Tuesday condemned U.S. efforts to "place arbitrary curbs on normal technology cooperation and trade," the Biden administration's plans to restrict investment in China are more limited than expected. The restrictions, which should be unveiled by the end of August, only apply to new investments and include carveouts for China's biotechnology and energy sectors, according to Bloomberg. Yellen during a Monday interview touted the narrow scope of the restrictions, saying the administration's plans will not "affect U.S. investment broadly in China" or "have a fundamental impact on affecting the investment climate for China."

As a result, some China experts say the plans do not go far enough. American Enterprise Institute senior fellow Derek Scissors said that Yellen's "constant attempts to reassure" China are "bizarre," while American Foreign Policy Council senior fellow Michael Sobolik accused the administration of "pulling punches."

"The Biden administration should just be honest and say what they want: improved relations with a genocidal regime," Sobolik told the Washington Free Beacon. "This is how America loses the Cold War with China. One concession at a time."

The Treasury Department did not return a request for comment. News of its watered-down investment restrictions comes as another top Biden administration official, climate czar John Kerry, meets with Chinese leaders in Beijing to hold climate change talks.

China has tied those negotiations to further U.S. concessions. The CCP's flagship newspaper, the Global Times, said on Monday that America must end its "crackdown on China" and "mend the past frictions" with the communist nation or lose "any kind of cooperation" on climate change. Kerry on the same day praised the Chinese government, which is by far the world's top carbon emitter, for "doing an incredible job of building out renewables." Kerry also urged the United States and China to put aside "political issue[s]" and "come together to take action."

Florida Republican congressman Mike Waltz subsequently hammered the Biden administration for its willingness to "overlook" Chinese threats in an attempt to maintain "helpless" climate negotiations.

"The Biden administration are climate appeasers willing to overlook all the threats posed by the CCP in a helpless attempt to get China on board with their environmental priorities," Waltz told the Free Beacon. "Not only are they weakening American energy independence, but further enabling China's pollution by building green energy projects with Russian coal."