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Speaker 1: Yeah, we're very pleased to be joined by Treasury Secretary

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Speaker 1: Janet Yellen. You join us now from India where you're

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Speaker 1: meeting your counterparts. It's the G twenty Finance Ministers and

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Speaker 1: Central Bank Governor's meeting. And really the cloud around this

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Speaker 1: meeting is the fresh data we got out of China today.

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Speaker 1: Beijing slowing momentum in their growth city is talking about

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Speaker 1: the growth target being at risk. I'd like to start

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Speaker 1: Treasury Secretary with the fact of whether you think this

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Speaker 1: means there could be an increased chance of a US recession.

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Speaker 2: Well, you're talking about the slow growth number from China,

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Speaker 2: is that right.

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Speaker 3: Anne Marie? Yes, correct, So I think China.

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Speaker 2: Has seen slower growth than they expected upon opening up

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Speaker 2: from COVID. Consumer spending has been relatively weak. It looks

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Speaker 2: like consumers are more focused on building back their savings buffers,

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Speaker 2: and so growth has been slow in As you know,

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Speaker 2: youth unemployment is quite high there. So I think the

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Speaker 2: Chinese are concerned about sluggish growth in their economy.

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Speaker 1: But what does this mean for US growth and global

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Speaker 1: growth overall? Is the soft landing in the United States?

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Speaker 1: So your base case scenario.

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Speaker 2: Well, many countries do depend on strong Chinese growth to

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Speaker 2: promote growth in their own economies, particularly countries in Asia,

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Speaker 2: and slow growth in China can have some negative spillovers.

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Speaker 2: For the United States, growth is slowed, but our labor

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Speaker 2: market continues to be quite strong. I don't expect a recession.

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Speaker 2: I think that we're on a good path to bringing

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Speaker 2: inflation down. The most recent inflation data were quite in

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Speaker 2: curb uraging that we're making progress on getting inflation down,

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Speaker 2: But as I'd hoped and expected, that would occur in

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Speaker 2: the context of a strong labor market, and we continue

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Speaker 2: to see that the labor market's The fact the labor

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Speaker 2: market's been so strong has encouraged more primage people to

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Speaker 2: enter the labor force into work, and that's helped take

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Speaker 2: a bit of the heat out of the labor market.

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Speaker 2: The fact that growth overall has slowed after we enjoyed

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Speaker 2: a rapid recovery, that's normal, but it's also led to

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Speaker 2: some reduction in the desire of firms to hire. Still

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Speaker 2: lots of job openings, but wage growth is moderating and

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Speaker 2: inflation is subsiding. So I think we're in a good

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Speaker 2: path on the United States.

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Speaker 1: Okay, so it sounds like soft landing is your base case,

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Speaker 1: and you don't think we're going to see a recession. Yesterday,

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Speaker 1: when you were speaking to reporters, you talked about this

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Speaker 1: de escalation with China, and you rolled out lifting tariffs

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Speaker 1: as part of this de escalation with Beijing.

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Speaker 4: So what is on the table?

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Speaker 2: So you know, several years have gone by in which

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Speaker 2: we've had COVID lockdowns, especially in China, and very limited

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Speaker 2: contact between senior officials in the United States in China.

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Speaker 2: And we now have a new economic team in China

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Speaker 2: that we need to establish relationships with. We need to

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Speaker 2: get our relationship back in a more stable place, put

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Speaker 2: a floor under it, and try to promote better understanding

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Speaker 2: between our countries. So I recently made a trip met

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Speaker 2: with a number of senior Chinese officials, including the new

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Speaker 2: economic team. There, we had very candid discussions. Each side

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Speaker 2: raised a series of concerns. Chinese certainly mentioned their concern

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Speaker 2: with the tariffs that we have in place, but we

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Speaker 2: had constructive conversations, deepened our understanding of the economic situation

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Speaker 2: and of our concerns, were able to address them and

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Speaker 2: agree that there are a broad range of global challenges,

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Speaker 2: particularly debt and climate change that affect the entire global

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Speaker 2: economy that we need to work on jointly, and I'm

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Speaker 2: hopeful we'll be able to do.

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Speaker 3: That more successfully.

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Speaker 2: On tariffs, you know, we put tariffs in place on

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Speaker 2: China because we had underlying concerns about unfair trade practices,

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Speaker 2: particularly those affecting intellectual property and technology transfer, and those

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Speaker 2: concerns really have.

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Speaker 3: Not been addressed.

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Speaker 2: We're undergoing a four year required review with tariffs, and

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Speaker 2: of course China also retaliated putting tariffs in place on us.

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Speaker 3: We have to see what comes out of the four

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Speaker 3: year review, but I.

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Speaker 2: Would emphasize that really the underlying concerns we have have

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Speaker 2: not yet been addressed, and we need to work on.

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Speaker 3: That going forward.

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Speaker 1: But when you're looking at de escalating, we're trying to

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Speaker 1: figure out what will be left on the table, because

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Speaker 1: what it feels right now is the administration is actually

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Speaker 1: just amping up when it comes to potential tit for

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Speaker 1: tat with Beijing. There is the outbound Executive order that

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Speaker 1: potentially we could see as soon as the end of

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Speaker 1: July or this summer. Could that be a place pulling

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Speaker 1: a punch from the outbound executive order, maybe making that

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Speaker 1: a little bit more toned down.

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Speaker 4: Could that be a place you could de escalate with Beijing.

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Speaker 2: Well, first of all, I want to say that what

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Speaker 2: we're doing is not tit for tat. What we're doing

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Speaker 2: is putting in place controls that are designed to protect

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Speaker 2: US national security and in some cases to address of

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Speaker 2: fundamental human rights abuses. And we do intend to protect

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Speaker 2: our national security. We have export controls that play an

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Speaker 2: important role in accomplishing that. And what I try to

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Speaker 2: explain to our Chinese counterparts is that our desire is

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Speaker 2: to make these US policies clearly national security focused, transparent

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Speaker 2: and narrow.

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Speaker 3: That we're not attempting.

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Speaker 2: To stifle economic progress in China that we have and

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Speaker 2: want to continue to have deep economic ties. After all,

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Speaker 2: this year, our trade has reached almost seven hundred billion dollars.

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Speaker 2: If the national security concern economic.

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Speaker 1: Madame Secretary of the National Security Concerns are so important,

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Speaker 1: Jake Sullivan called for this outbound of executive order two

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Speaker 1: years ago, why is it taking the administration so long?

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Speaker 2: So we are looking carefully at outbound investment controls, and

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Speaker 2: they would serve as a complement to the export controls

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Speaker 2: that we have in place to make sure that we

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Speaker 2: have covered all the channels by which technologies can be

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Speaker 2: transferred to China that we think pose national security concerns.

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Speaker 2: I explained to my Chinese counterparts that if we go

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Speaker 2: forward with these, they would indeed be narrowly targeted. They

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Speaker 2: would focus on a few sectors, in particular semiconductors, quantum computing,

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Speaker 2: and artificial intelligence. That they would contain a combination of

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Speaker 2: notification requirements and in very narrowly scoped portions of these

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Speaker 2: sectors prohibitions.

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Speaker 3: But these would not be broad controls that.

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Speaker 2: Would affect US investment broadly in China or in my opinion,

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Speaker 2: have a fundamental impact on affecting themen climate for China.

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Speaker 2: So these with national security focused.

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Speaker 4: It sounds like it's already done.

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Speaker 1: Is the administration have it finished and just waiting for

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Speaker 1: a good time to release it.

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Speaker 2: We want to make sure if we do this, that

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Speaker 2: we get it right, and we've been working on the details.

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Speaker 2: If we do go ahead, and there is a good

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Speaker 2: chance that we will, that we would put out along

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Speaker 2: with the executive Order and notice of proposed rulemaking so

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Speaker 2: that the public would have a chance to comment on

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Speaker 2: these proposed controls. And we would receive a wide range

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Speaker 2: of public input before finalizing anything that we do.

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Speaker 1: Madame Secretary, you obviously have a lot on your plate

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Speaker 1: when it comes to re engaging with China and your

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Speaker 1: discussions there. Just off this trip from Beijing. I'm curious

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Speaker 1: how difficult the dialogue is going to continue to be

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Speaker 1: after the revelations about the Chinese hacking of your colleague,

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Speaker 1: Secretary Gina Ramundo.

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Speaker 2: So, I do have concerns about hacking of US government

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Speaker 2: officials or private individuals or companies, and I know the

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Speaker 2: United States has expressed those concerns. But we intend to

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Speaker 2: continue to deepen our discussions with China to increase our engagement.

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Speaker 2: It's especially important to explain what our motivation is to

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Speaker 2: avoid misunderstandings that can lead to necessary, unnecessary and dangerous escalation.

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Speaker 2: President Chi and President Biden agreed in Bali that senior officials,

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Speaker 2: including those in economics, should interact more regularly, and I

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Speaker 2: think an outcome of my trip there was that we

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Speaker 2: will have deeper, ongoing engagement at all levels.

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Speaker 4: When did you learn about the China email hacking.

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Speaker 1: I'm curious if you had a chance to maybe bring

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Speaker 1: this up on your trip to Beijing.

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Speaker 2: I believe I did not know about that in Beijing.

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Speaker 2: Wasn't one of the things that we discussed.

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Speaker 1: I also want to ask about what's happening on the ground,

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Speaker 1: something that I know is very important to you, and

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Speaker 1: this comes to debt relief of these developing countries. There

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Speaker 1: has been this push from the US administration to use

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Speaker 1: the Zambia principle for other countries like Ghana, but that's

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Speaker 1: not getting the broad support it needs in India. On

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Speaker 1: the ground amongst other G twenty finance ministers is China

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Speaker 1: the hold up here?

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Speaker 2: Well, we designed the G twenty designed something called the

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Speaker 2: Common Framework, which is a set of principles and processes

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Speaker 2: to deal with unsustainable debt situations.

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Speaker 3: And we would like.

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Speaker 2: To see countries that apply to use the Common Framework

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Speaker 2: get rapid relief from their debt that they need in

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Speaker 2: order to grow and be able to attract investment and

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Speaker 2: undertake IMF programs that can help to stabilize their economies.

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Speaker 3: And the few.

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Speaker 2: Cases that have applied to use the Common Framework, including Zambia.

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Speaker 3: Have taken far too long.

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Speaker 2: The process has been onerous and it's taken a very

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Speaker 2: long time to get debt relief.

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Speaker 3: We are pleased that.

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Speaker 2: China has become China, after all, is a major creditor

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Speaker 2: of these countries. We have been anxious to see China

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Speaker 2: move more quickly and take a more constructive attitude of

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Speaker 2: participating in these debt relief talks and getting agreement on

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Speaker 2: Zambia was an important step. China has also been helpful

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Speaker 2: in Ghana, the case of Ghana and Sri Lanka, and

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Speaker 2: I'm hopeful that we'll be able going forward to make

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Speaker 2: more rapid progress. I should emphasize that the debt issue

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Speaker 2: is one that concerns the entire G twenty and we

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Speaker 2: are united in wanting to see this framework work more

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Speaker 2: effectively and it is a priority for India as well.

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Speaker 1: Madam Secretary, thank you so much for your time today

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Speaker 1: live from India at the G twenty Finance Ministers and

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Speaker 1: Central Bank Governor's meeting. And safe travels to you as

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Speaker 1: an you're heading off to Vietnam next