The final time a U.S. Treasury secretary visited China, Washington and Beijing had been locked in a commerce battle, the Trump administration was making ready to label China a forex manipulator, and fraying relations between the 2 nations had been roiling international markets.

Four years later, as Treasury Secretary Janet L. Yellen prepares to reach in Beijing, most of the financial coverage considerations which have been festering between the United States and China stay — or have even intensified — regardless of the Biden administration’s much less antagonistic tone.

The tariffs that President Donald J. Trump imposed on Chinese items are nonetheless in impact. President Biden has been working to limit China’s entry to essential expertise comparable to semiconductors. And new restrictions curbing American funding in China are looming.

Treasury Department officers have downplayed expectations for main breakthroughs on Ms. Yellen’s four-day journey, which begins when she arrives in Beijing on Thursday. They counsel as a substitute that her conferences with senior Chinese officers are supposed to enhance communication between the world’s two largest economies. But tensions between United States and China stay excessive, and conversations between Ms. Yellen and her counterparts are prone to be tough. She met in Washington with Xie Feng, China’s ambassador, on Monday, and the 2 officers had a “frank and productive discussion,” in accordance the Treasury.

Here are a number of the most contentious points which have sown divisions between the United States and China.

Technology and commerce controls

Chinese officers are nonetheless smarting on the Biden administration’s 2022 determination to put significant limitations on the sorts of superior semiconductors and chip-making equipment that may be despatched to China. Those limits have hampered China’s efforts to develop synthetic intelligence and different kinds of superior computing which are anticipated to assist energy every nation’s economic system and navy going ahead.

And the Biden administration is mulling further controls on advanced chips and on American investment into cutting-edge Chinese technology.

Semiconductors have all the time been one of many largest and most beneficial classes of U.S. exports to China, and whereas the Chinese authorities is investing closely in its home capability, it stays a few years behind the United States.

The Biden administration’s subsidy program to strengthen the U.S. semiconductor business has additionally rankled Chinese officers, particularly because it consists of restrictions on investing in China. Companies that settle for U.S. authorities cash to construct new chip amenities within the United States are forbidden to make new, high-tech investments in China. Beijing swiped again on Monday, saying that it’s going to limit the export of sure minerals used within the manufacturing of some chips.

And whereas Chinese officers — and a few American producers — had been hopeful that the Biden administration would carry tariffs on lots of of billions of {dollars} of Chinese imports, that doesn’t appear to be within the offing. While Ms. Yellen has questioned the efficacy of tariffs, different high officers throughout the administration see the levies as useful for encouraging provide chains to maneuver out of China.

The administration is using each carrots and sticks to hold out a coverage of “de-risking” or “friend-shoring” — that’s, attractive provide chains for essential merchandise like electrical automobile batteries, semiconductors and photo voltaic panels out of China.

Deteriorating enterprise environments

Companies doing enterprise in China are more and more fearful about attracting destructive consideration from the federal government. The most up-to-date goal was Micron Technology, a U.S. reminiscence chip maker that failed a Chinese safety evaluate in May. The transfer may lower Micron off from promoting to Chinese firms that function key infrastructure, placing roughly an eighth of the corporate’s international income in danger. In current months, consulting and advisory firms in China with overseas ties have confronted a crackdown.

American officers are rising extra involved with the Chinese authorities’s use of financial coercion towards nations like Lithuania and Australia, and they’re working with European officials and different governments to coordinate their responses.

Businesses are additionally alarmed by China’s ever-tightening nationwide safety legal guidelines, which embrace a stringent counterespionage law that took impact on Saturday. Foreign companies in China are reassessing their actions and the market data they collect as a result of the regulation is obscure about what’s prohibited.

“We think this is very ill advised, and we’ve made that point to several members of the government here,” mentioned R. Nicholas Burns, the U.S. ambassador to China, in an interview in Beijing.

In the United States, firms with ties to China, just like the social media app TikTok, the purchasing app Temu and the clothes retailer Shein, are facing increasing scrutiny over their labor practices, their use of American buyer information and the methods they import products into the United States.

Currency

China’s forex, the renminbi, has usually been a supply of concern for American officers, who’ve at instances accused Beijing of artificially weakening its forex to make its merchandise cheaper to promote overseas.

The renminbi’s current weak spot might pose probably the most tough problem for Ms. Yellen. The forex is down greater than 7 % towards the greenback prior to now 12 months and down practically 13 % towards the euro. That decline makes China’s exports extra aggressive within the United States. China’s commerce surplus in manufactured items already represents a tenth of your complete economic system’s output.

The renminbi just isn’t alone in falling towards the greenback currently — the Japanese yen has tumbled for numerous causes, together with rising rates of interest within the United States because the Federal Reserve tries to tamp down inflation.

Chinese economists have blamed that issue for the renminbi’s weak spot as effectively. Zhan Yubo, a senior economist on the Shanghai Academy of Social Sciences, mentioned the decline within the renminbi was the direct results of the Fed’s current will increase in rates of interest.

At the identical time, China has been reducing rates of interest to assist its flagging economic system. The rate of interest that banks cost each other for in a single day loans — a benchmark that tends to affect all different rates of interest — is now a little bit over 5 % in New York and barely 1 % in Shanghai. That reverses a longstanding sample during which rates of interest had been often increased in China.

The Fed’s charge will increase have made it extra enticing for firms and households to ship cash out of China and make investments it within the United States, in defiance of Beijing’s stringent limits on abroad cash actions.

China pledged as a part of the Phase 1 commerce settlement with the United States three years in the past to not search a bonus in commerce by pushing down the worth of its forex. But the Biden administration’s choices could also be restricted if China lets its forex weaken anyway.

Global debt

China has offered greater than $500 billion to growing nations via its lending program, making it one of many world’s largest collectors. Many of these debtors, together with a number of African nations, have struggled economically because the pandemic and face the opportunity of defaulting on their debt funds.

The United States, together with different Western nations, has been pressing China to permit a few of these nations to restructure their debt and scale back the quantity that they owe. But for greater than two years, China has insisted that different collectors and multilateral lenders take up monetary losses as a part of any restructuring, bogging down the mortgage aid course of and threatening to push tens of millions of individuals in growing nations deeper into poverty.

In June, worldwide collectors together with China agreed to a debt aid plan with Zambia that would offer a grace interval on its curiosity funds and prolong the dates when its loans are due. The association didn’t require that the World Bank or International Monetary Fund write off any money owed, providing international policymakers like Ms. Yellen hope for comparable debt restructuring in poorer nations.

Human rights and nationwide safety points

Tensions over nationwide safety and human rights have created an environment of mutual mistrust and spilled over into financial relations. The flight of a Chinese surveillance balloon throughout the United States this 12 months deeply unsettled the American public, and members of Congress have been urgent the administration to disclose extra of what it is aware of concerning the balloon. Mr. Biden’s recent labeling of China’s leader, Xi Jinping, as a “dictator” additionally rankled Chinese officers and state-run media.

American officers proceed to be involved about China’s human rights violations, together with the suppression of the democracy motion in Hong Kong and the detention of primarily Muslim ethnic minorities within the Xinjiang area of northwestern China. A senior Treasury Department official, talking on the situation of anonymity earlier than Ms. Yellen’s journey, mentioned the United States had no intention of shying away from its views on human rights in the course of the conferences in China.

Chinese officers proceed to protest the varied sanctions that the United States has issued towards Chinese firms, organizations and people for nationwide safety threats and human rights violations — together with sanctions against Li Shangfu, China’s protection minister. The Chinese authorities has cited these sanctions as a motive for its rejection of high-level navy dialogues.