U.S. Treasury Secretary Janet Yellen has been hardening her public stance on China as of late, underlining issues related to Ukraine and Taiwan just before the IMF and World Bank member countries convene for their Spring Meetings in Washington next week.

Former Fed chair and current U.S. Treasury Secretary Janet Yellen called on China to help end the war in Ukraine during a speech at Washington think tank Atlantic Council.  

She underlined that China, which has not officially condemned Russia over the invasion, risks losing its global standing and cannot expect future appeals on sovereignty and territorial integrity to be respected if it fails to respect the principles in Ukraine «now when it counts».

«The world’s attitude towards China and its willingness to embrace further economic integration may well be affected by China’s reaction to our call for resolute action on Russia,» Yellen said. «Whatever China’s geopolitical aims and strategies, we see no benign interpretation of Russia’s invasion, nor of its consequences for the international order.»

Supply Chain Worries

According to Yellen, China’s reliance on state-owned firms and other practices have damaged U.S. interests and it will be increasingly difficult for China and the West to separate economic issues from broader national security concerns. 

One area Yellen specifically highlighted in U.S.-China relations is issues related to supply chains, with concerns about strict lockdowns and geopolitical conflicts. She suggested more «friendshoring» to shift supply chains to more trusted partner countries.

«I would like to see us preserve the benefits of deep economic integration with China – not moving to a bipolar world – but I believe that's a danger we need to address,» Yellen said.

Taiwan Response

Yellen’s latest remarks came one week after she made similarly strong statements about China while testifying before the House Financial Services Committee.

In response to a question by North Carolina Republican Representative Patrick McHenry on whether or not the Treasury would be willing to use sanctions against China if Beijing acted aggressively towards Taiwan, Yellen said that she believed that the U.S. has already demonstrated the pain it can impose through the Ukraine-Russia conflict.

«I think you should not doubt our ability and resolve to do the same in other situations,» she said.