China needs to make market reforms and reconsider its recently announced export controls, along with other “unfair economic practices.” This was the message from U.S. Treasury Secretary Janet Yellen following a meeting in Beijing with Chinese Premier Li Qiang aimed at mending economic relations between the United States and China.

In a statement released July 7, Yellen explained that the United States is seeking healthy economic competition with China but said that would only be sustainable if that competition is fair.

Yellen expressed concerns about new export controls China recently announced on a pair of critical minerals used to make valuable pieces of technology like semiconductors. While the U.S. is still evaluating the effect of these control actions, they serve as a reminder of how important it is to build resilient and diversified supply chains, Yellen said.

China must work for American businesses and workers if the country hopes to maintain an economic relationship with the U.S., including a coordinated effort with American, Yellen warned.

A shift toward market reforms would be in the best interests of China because it would spur rapid growth in the country, eventually helping “lift hundreds of millions of people out of poverty,” Yellen continued

The U.S. is not looking to completely separate the world’s two biggest economies, because that would not only be destabilizing for the global economy, but also “virtually impossible to undertake,” Yellen said. Instead, the U.S. is looking to diversify rather than decouple from China, she said. 

“Many of [China’s] firms understand how a level playing field can benefit both of our countries. China has an enormous and growing middle class, with consumers who are eager to consume American goods and services,” Yellen said. “In fact, trade between our two countries reached an all-time high [in 2022]. And if it is fair, trade and investment can support American jobs at home and promote American innovation. A stable and constructive relationship between the U.S. and China is in the interests of American workers and businesses.”