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US-China tensions

Yellen vows 'full array of tools' to curb China's abusive practices

Biden's Treasury pick calls Beijing 'our most important strategic competitor'

Former Federal Reserve chair Janet Yellen, tapped by U.S. President-elect Joe Biden to lead the treasury, echoed the outgoing Trump administration's grievances about China's trade practices at her confirmation hearing Tuesday.

NEW YORK -- The U.S. is prepared to "use the full array of tools" against "abusive" Chinese practices, Treasury secretary nominee Janet Yellen said Tuesday, projecting a tough stance on the bilateral trade row ahead of President-elect Joe Biden's inauguration.

"We need to take on China's abusive, unfair and illegal practices," Yellen told the Senate Finance Committee in her confirmation hearing, soon after calling the Asian country "our most important strategic competitor."

"China is undercutting American companies by dumping products, erecting trade barriers and giving illegal subsidies to corporations," as well as "stealing intellectual property" and engaging in such unfair practices as "forced technology transfers," the former Federal Reserve chair said, echoing the outgoing Trump administration's complaints against Beijing.

Yellen's remarks Tuesday suggest that the Sino-American economic relationship will remain fraught under Biden. But the two administrations differ on how to counter Beijing.

Yellen stressed the importance of working with allies, as well as of investing in infrastructure, research and development, and elsewhere in order to compete with China.

The veteran economist, who will be the first woman to lead the U.S. Treasury if confirmed, did not take a clear stance on the use of tariffs but said that when it comes to addressing such issues as forced technology transfers, the U.S. "should focus directly on those practices."

Biden has said he will not act quickly to remove Trump's tariffs on China before a comprehensive review and consulting with allies.

And while acknowledging the importance of sanctions for cybersecurity and other threats -- administered and enforced by the Office of Foreign Assets Control under Treasury -- Yellen said she will be "focused on making sure that they're used strategically" and "in the most effective way."

To this end, Yellen said she will ask Deputy Treasury Secretary-designate Wally Adeyemo to "quickly" begin a review of current U.S. sanctions policy if he is confirmed.

In its final months, the Trump administration has broadened such policy to include a ban on trading and owning a wide range of China stocks, including the country's top three telecommunications carriers -- a move criticized for hurting U.S. investors.

Biden's economic policy team also has bigger domestic challenges to address. In the face of economic damage from COVID-19, Yellen told the Senate committee that the U.S. must "act big" on economic relief or risk "a longer, more painful recession now and longer-term scarring of the economy later."

Questioned on rising government debt, Yellen said that the most important thing that can be done now to "put us on a path of fiscal sustainability is to defeat the pandemic, to provide relief to American people, and then to make long-term investments that will help the economy grow and benefit future generations."

Yellen also expressed an openness to the idea of the U.S. issuing long-term debt to take advantage of low rates.

Meanwhile, China reports that its gross domestic product grew a real 2.3% in 2020, making it the only major economy to expand in the pandemic-stricken year.

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