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(Bloomberg) -- A technology decoupling between the U.S. and China would splinter the global economy into rival systems and make trade and integration difficult, former Federal Reserve Chair Janet Yellen warned.
While near term trade tensions between the U.S. and China may have eased, Yellen said bigger and more complicated issues are coming down the track, including competition over the technology systems of both countries. That issue, along with others such as state subsidies in China will dominate further trade negotiations.
“These issues are going to be quite difficult to deal with and will have very significant consequences for the global economy and the pace of technology change affecting the entire global economy,” Yellen said in remarks to a conference in Hong Kong.
“We learned from one another that technology developed in one part of the world needs to be applied in other areas,” she said. “If that splits apart and you lose those synergies that is very difficult. I hope we don’t go there.”
Describing the so-called phase-one trade agreement as a truce, Yellen cautioned that high tariffs remain on both Chinese and U.S. goods and the uncertainty that businesses face hasn’t disappeared.
“Yet more troublesome and difficult issues are coming down the pipe.”
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