Treasury Secretary Janet Yellen can expect a much warmer welcome in Beijing this week than Foreign Secretary Antony Blinken not so long ago. China generally prefers to negotiate with US business officials, believing them to be pragmatic — and intent on making deals to benefit from Chinese economic growth. This time, however, it may be Chinese leaders who are out for a bargain.
When Yellen arrives in China, President Xi Jinping will have a much weaker economic hand than in the past. Instead of enjoying a strong rebound after the end of its Covid-zero policy last December, the Chinese economy now appears stuck in neutrality. Growth in the second quarter is likely to be well below expectations: manufacturing activities declined in both April and May, while exports, which have supported the economy during the pandemic, fell too in May.
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