US Lobs Fresh Accusations at Beijing As Yellen Spouts ‘Cooperation’ Rhetoric

After US Secretary of State Antony Blinken visited Beijing last month, Treasury Secretary Janet Yellen arrived in China seemingly to try to salvage relations with the Asian powerhouse. However, as the diplomatic waltz carries on, so US-China tensions, whether in the Indo-Pacific, or in the spheres of economy and technology, continue unabated.

Washington has launched more verbal attacks at Beijing, despite US Treasury Secretary Janet Yellen just having visited Beijing in an apparent attempt to try to improve strained relations.

The US accused China of carrying out “coercive and risky” moves in the disputed areas of the South China Sea in relation to vessels from the Philippines.

The new controversial statements against China came after the Western command of the Philippine military claimed that 48 Chinese fishing vessels had been seen near Recto Bank in the South China Sea.

Also referred to as Reed Tablemount, the contested Recto Bank is an underwater reef formation believed to contain significant reserves of oil and natural gas. Despite a lingering territorial dispute over the reef, the Philippines and China signed a memorandum of understanding in 2018 to conduct joint oil and gas exploration in the area. However, the agreement ended up in a deadlock.

The Philippines consider Recto Bank part of its 200 nautical-mile exclusive economic zone. After the Philippine Coast Guard claimed that two of its ships were "illegally thwarted" by a China Coast Guard ship in the South China Sea, Beijing responded by saying maneuvers of its vessels were “professional and restrained”.

"The Ren’ai Reef is part of China’s Nansha Islands. On 30 June, the Philippine Coast Guard vessels intruded into the waters off the Ren’ai Reef without Chinese permission. In accordance with the law, the Chinese Coast Guard vessel carried out law enforcement activities to uphold China’s territorial sovereignty and maritime order," said Foreign Ministry spokesman Wang Wenbin at a press conference.

The US has weighed in with its fresh accusations targeting China as tensions continue to brew in the highly contested area of the South China Sea. China has maintained territorial disputes with Taiwan, Indonesia, Malaysia, Vietnam, the Philippines and Brunei around islands in the region that have significant, untapped reserves. Furthermore, the passage of US warships, which Beijing highlights as a breach of international law and a ploy to undermine China's sovereignty and security, has adding to the tense situation. Washington insists that its naval force will remain in the area, despite the People's Republic of China repeatedly objecting to such moves.

Inspections Targeting China Firms

Yellen's visit to China, coming as the economic and financial contradictions between the two countries are increasing, has been framed by Washington as an attempt to stabilize the US-China relationship via talks. In effect, US policies have consistently done everything to plunge ties between the two countries to rock-bottom level. Yellen offered assurances on Thursday that she had been tasked with "deepening communication with Beijing on a range of issues", and she added that her visit presented an opportunity to avoid "miscommunications or misunderstandings". But Washington's actions speak louder than words.

A case in point is the ongoing manifestation of the US trade war waged against China, specifically in the sphere of technology, ranging from chip-making to artificial intelligence.

As part of a deal that the US pushed through with China in August 2022, America's regulators have been allowed to examine audit working papers of US-listed Chinese companies. Now, the Public Company Accounting Oversight Board officials have started a fresh round of inspections, according to sources cited by US media. These will ostensibly target around a dozen New York-listed Chinese companies. The firms include Tencent Music Entertainment Group, DiDi Global Inc and NetEase Inc. Previously, a recent round of checks on clients reportedly targeted Chinese units of PricewaterhouseCoopers LLP, Ernst & Young LLP and Deloitte & Touche LLP. KPMG LLP’s China arm was inspected in 2022.

Earlier this year, Erica Williams, chairwoman of the Public Company Accounting Oversight Board (PCAOB), claimed the agency’s goal was to review firms to unearth possible "insufficient information technology controls". Firms that did not pass muster after such scrutiny by the US inspectors could be thrown off New York stock exchanges.

The large-scale targeting of Chinese companies by US regulators with their sweeping “inspections” has been decried by many Chinese experts as based on “bias” and a tool to exert pressure on China, according to media reports of the Asian powerhouse.

Self-Defeating US Trade Policies

Before Yellen's visit, US Secretary of State Antony Blinken made a long-awaited trip to Beijing to meet with senior Chinese diplomats, including President Xi Jinping. As any positive outcomes of Blinken's visit remain obscure, with US President Joe Biden publicly calling China's Xi a “dictator" shortly after, Washington's actions continue to follow the path inked out under ex-president Donald Trump and White House incumbent Joe Biden. Whether it is the protectionist (albeit self-defeating) trade policies espoused by the 45th POTUS, the sanctions on China’s technology, or growing US and NATO operations in the Pacific while peddling the "China threat" narrative, Washington has sought to "contain" by all means possible what it claimed was an increasingly "assertive" Beijing.

Most recently, these not-so-well thought out US strategic efforts to cut China out of the high-tech economic race spilt over into the sphere of semiconductors. In October 2022, the Biden administration unveiled an unprecedented set of export controls that restricted Chinese companies from purchasing advanced chips made anywhere in the world using US technology, as well as chip-making equipment. At the time, US media noted that Washington's move would thwart "China’s technological ambitions", as the global semiconductor industry was "almost entirely" dependent on the US and its allies.

However, in retaliation, China sanctioned America's Micron Technology in May and, more recently, imposed restrictions on exporting two strategic raw materials, gallium and germanium. The two metals are used in the manufacturing of advanced microchips and a number of military weaponry, such as radars. The US imports so many rare metals from China that, despite having its own vast reserves of the materials, totally replacing those supply lines could take “generations”, Michael Maloof, a former senior security policy analyst in the US Office of the Secretary of Defense, told Sputnik. Furthermore, to sever the US industry's reliance on China for microchip and technology production might require "tremendous amounts of investment".