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Treasury Secretary Janet Yellen has warned that cutting off economic ties between China and the United States is not a feasible or desirable approach. Her remarks came as she is on a five-day visit to China, aimed at reinforcing the economic relationships while addressing critical issues such as unfair trade practices and the overproduction of inexpensive goods.

Yellen said, “A full economic separation is neither practical nor desirable. President Biden and I firmly reject the idea that the United States should decouple from China.”

During her address at an American Chamber of Commerce event in Guangzhou, Yellen addressed the challenges American firms face in China. She referenced a survey by the chamber, which found that a third of American businesses reported discriminatory practices. According to Yellen, such barriers to entry and coercive actions against US companies undermine not only those firms but also the broader business environment in China. She said, “I strongly believe that this doesn’t only hurt these American firms; ending these unfair practices would benefit China by improving the business climate here.”

Secretary Yellen also pointed to the issue of Chinese manufacturing overcapacity, which presents a risk of saturating the global market with products priced below their actual market value. This situation, she noted, could disadvantage American businesses and workers alongside international counterparts in countries such as India and Mexico.

Yellen’s comments come as the US has continued to raise concerns about the economic strategies employed by China, particularly in the wake of the pandemic-induced economic slowdown. With domestic demand failing to keep pace with production, especially in subsidized sectors like clean energy, there’s an impending risk of these goods flooding global markets. This scenario complicates efforts by the US and its allies to compete on a “fair basis.”