Yellen will first head to Gandhinagar, India, for a meeting of Group of 20 finance and central bank heads, where she will push for reforming global lending institutions to boost the size and scope of their firepower and for advancing talks on easing the debt burden for poorer nations, a senior Treasury official said.
The US finance chief will be making her third visit to India in nine months amid a concerted push by Washington to strengthen trade and economic ties with China’s giant neighbour.
Yellen will use her G-20 participation “to help deepen our already significant relationship,” the Treasury said in a statement, adding that she will “stress the importance of deepening” ties with the country.
Yellen then heads to Vietnam, where she’ll meet with senior government officials and private businesses.
Strengthen Ties
While the G-20 meeting is the prime driver of the trip, both visits fit into Yellen’s broader “friend-shoring” initiative, the idea that the US should strengthen trade relationships with trusted partners to bolster global supply chains, reduce dependence on a small number of nations for critical components and shield the economy from geopolitical risks.
Yellen’s latest tour comes on the heels of her landmark visit to China last week, her first as Treasury secretary, which sought to ease tensions between the world’s two largest economies and reinstate channels of communication between them.
In Beijing, Yellen repeatedly stressed that the US is not seeking to decouple from China but rather to diversify supply chains in critical areas in order to protect its national security. While the two sides described their talks as constructive, they also remain locked in a fierce competition that has seen both nations impose — or consider — further restrictions on access to key technologies.
Finance Talks
In India, Group of 20 finance ministers and central bank governors meet on July 17-18 and look to make progress on bolstering the resources of multilateral development banks. They also seek to encourage greater flows of credit to address global challenges like climate change.
Yellen has championed a plan to expand the World Bank’s scope. Beyond country-by-country projects, she wants all the multilateral development banks to back cross-border efforts that address broad threats like climate change and pandemics.
The US estimates that these lenders — as a system — could unlock as much as $200 billion over the next 10 years by implementing change, the Treasury official said.
Debt Distress
During the talks, Yellen will also focus on debt distress, the official said, urging all bilateral official creditors, including China, to conclude existing debt-restructuring cases.
An agreement to restructure Zambia’s debt last month was the first major relief won by a developing country under the G-20’s Common Framework, which brings the traditional creditor nations of the Paris Club around the same negotiating table with China and India.
Breakthroughs on specific outstanding cases are unlikely in these meetings, partly because not all debtor nations will be in attendance.
More broadly, reaching consensus at the G-20 — which brings together geopolitical rivals — can be tricky.
India, the rotating head of the G-20 this year, was unable in the most recent finance meeting in April to secure either a joint statement or even a chair’s statement of summary, underscoring deep divisions in a group that includes Russia.
In February, the chair’s statement had reiterated G-20 language from last year, pointing out that Russia’s invasion of Ukraine had led to a United Nations vote of condemnation.
Vietnam Itinerary
In Hanoi, Yellen will meet central bank governor Nguyen Thi Hong on July 20 and plans to “express satisfaction” on the work the nations are doing to address concerns about Vietnam’s foreign-exchange management.
Under the Trump administration, the US in 2020 designated Vietnam as a currency manipulator, a label that the Biden team removed a year later.
She will then head to a bilateral meeting with Prime Minister Pham Minh Chinh, in which she will stress the deep economic ties between the US and Vietnam “help create greater economic resilience” through friend-shoring. She meets with Finance Minister Ho Duc Phoc July 21.
The US Treasury chief will also take part in a discussion with female economists, and meet with Communist Party of Vietnam Central Economic Commission Chair Tran Tuan Anh.
