Yellen says ‘no alternative’ to dollar, urges US-China cooperation for sake of the world
Former Treasury Secretary cites 'serious conflicts' in trade but says global threats like AI require joint action.
In a keynote address at the HSBC Global Investment Summit in Hong Kong, former US Treasury Secretary Janet Yellen delivered a nuanced message on the critical but contentious US-China economic relationship. Yellen, who served from 2021 to 2025, stated that a complete decoupling between the two superpowers is "something that you don’t want to see," emphasizing their deep, intertwined trade and investment links. However, she did not shy away from the friction points, arguing that China's reliance on exports for growth has created "serious conflicts" with advanced economies unwilling to cede control of their advanced manufacturing sectors.
Yellen framed these trade tensions as issues to be managed through negotiation, while pivoting to a more urgent call for collaboration on transnational threats. She contended that in the face of "huge global problems," the US and China "really need to cooperate." She specifically singled out artificial intelligence as an area posing significant threats, requiring joint efforts to ensure the safety of AI systems. Yellen also pointed to past successes in bilateral climate change efforts and warned that ongoing Middle East conflicts create economic uncertainties that could fuel inflation, further underscoring the need for stable great-power relations.
- Yellen explicitly warned against US-China decoupling, citing deep existing trade and investment ties that should be preserved.
- She identified China's export-driven model and large trade surplus as creating 'serious conflicts' with other advanced economies over manufacturing.
- Yellen named AI safety as a critical area requiring US-China cooperation to manage global threats, alongside climate change and economic stability.
Why It Matters
Sets the tone for future economic diplomacy, highlighting AI governance as a new, critical arena for superpower cooperation amid ongoing trade disputes.