US Treasury Secretary Janet Yellen insisted Friday that Washington and Beijing had to reestablish "healthy economic relations" after a period of strained ties between the world's two biggest economies.
But, she said, the United States would not shy away from taking unilateral action against Chinese firms supplying defense equipment to Russia for its invasion of Ukraine if Beijing failed to take preventative action.
"We do not seek to decouple our economy from China's," Yellen told reporters after a two-day meeting with Chinese Vice Premier He Lifeng in San Francisco.
"This would be damaging to both the US and China and destabilizing to the world."
The meeting came just ahead of a sit-down between US President Joe Biden and Chinese Premier Xi Jinping, who will be in the California city next week for an APEC (Asia-Pacific Economic Cooperation) summit of leaders from around the Pacific.
Ties between Washington and Beijing became particularly troubled under former US president Donald Trump, who used China as a domestic foil, imposing populist tariffs on Chinese imports as part of his drive to shore up US manufacturing.
The rhetoric did not improve under Biden, and relations have been further strained as Beijing boosts cooperation with Russia, part of an effort to counterbalance US global heft.
But in recent months the Biden administration has made a number of small steps to take the heat off things, with visits to China by Secretary of State Antony Blinken, as well as by Yellen and Commerce Secretary Gina Raimondo.
"Over the past two days, Vice Premier He and I have built on this foundation, with candid, direct and productive engagements," Yellen said.
"There is no substitute for in-person diplomacy," she said, adding the two had agreed she would return to China next year.
Yellen however cautioned her counterpart that Washington was aware that Chinese companies were aiding Russia's invasion of Ukraine.
"We are concerned that in spite of a sanctions programs that we've put in place, that equipment that is critical to Russia's military effort is nevertheless evading sanctions and being delivered to Russia," she said.
Yellen said she was not accusing the Chinese government of complicity, but noted "some Chinese private firms... as well as some financial institutions" were involved in "facilitating that flow."
"I stressed in our conversations... we would like to see China crack down," she said, adding that in the absence of action Washington was "prepared to put in place further sanctions."