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Kandy Wong

A decoupling between China and the United States is something “that you don’t want to see”, says former US Treasury secretary Janet Yellen, adding that both countries have developed deep trade and investment relationships that should be preserved and encouraged to thrive.
Speaking in Hong Kong at the HSBC Global Investment Summit on Wednesday, Yellen also argued that China’s reliance on exports for growth – resulting in a trade surplus with the rest of the world – has created “serious conflicts” with advanced economies that are unwilling to “completely cede control of advanced manufacturing to China”.
These are the issues that Washington must address through negotiations, she said.
In the face of “huge global problems”, the US and China “really need to cooperate” to address the world’s issues, Yellen said during a panel discussion at the summit. As an example, she pointed to some successful efforts to tackle climate change through bilateral cooperation.
Yellen, having served as US Treasury secretary under the presidential administration of Joe Biden from 2021 to 2025, said Middle East conflicts create economic uncertainties and supply shocks that could put more pressure on inflation.
Regarding US-China collaboration, Yellen singled out artificial intelligence as an area with significant threats, requiring the US and China to cooperate to ensure the safety of AI systems.
“We should preserve the ability to work together on common things that affect not only our two countries, but the entire globe,” she contended.
Known for advocating a more constructive relationship with China, Yellen reckoned that there were national security threats and economic concerns regarding Chinese practices, and she pointed to Beijing’s leverage over rare earths and magnets.
“We need to take our own supply-chain resilience seriously,” she said. “We do have legitimate concerns about overdependence on China.”


But when it comes to addressing the situation, Yellen warned that moving all production to the US would come at the expense of “all of the benefits of trade and division of labour globally”. The solution, she said, should involve preserving trade.
Regarding the US dollar’s role as the world’s reserve currency, Yellen said that the dollar has “deep advantages” – such as liquid capital markets and the transparency of the US legal system – leaving “no obvious substitutions”.
“The US certainly needs to be careful about the inflation path,” she warned, noting that good macroeconomic policies, as well as low and stable inflation, were “central to the dollar playing the role of a reserve currency over time”.
Recent gold price surges reflect “a lot of uncertainties” among central banks and investors, she said, while some countries seek ways to bypass the dollar and avoid US sanctions against nations such as Russia and Iran.
“But the dollar is the dominant reserve currency, and I don’t think that’s going to be unravelled any time soon,” Yellen said.
With respect to China’s yuan being used more in regional arrangements to conduct transactions that do not involve the dollar, she noted that “almost 90 per cent of cross-border transactions involve the dollar”.
Even if stablecoins take off in a way that many have expected, Yellen said, “those are likely to be largely dollar-based, and there is just no alternative”.


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Former US Treasury secretary, in Hong Kong, discusses China’s ‘serious conflicts’ with other economies in trade, while warning of decoupling risks


Former US Treasury secretary, in Hong Kong, discusses China’s ‘serious conflicts’ with other economies in trade, while warning of decoupling risks.


Yellen says ‘no alternative’ to dollar, urges US-China cooperation for sake of the world

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Former US Treasury secretary, in Hong Kong, discusses China’s ‘serious conflicts’ with other economies in trade, while warning of decoupling risks

Former US Treasury secretary, in Hong Kong, discusses China’s ‘serious conflicts’ with other economies in trade, while warning of decoupling risks