US Treasury's Yellen wants 'open and substantive' talks with Chinese vice premier

SAN FRANCISCO (Reuters) - U.S. Treasury Secretary Janet Yellen on Thursday told Chinese Vice Premier He Lifeng she wants to have an "open and substantive" discussion on the U.S.-China economic relationship, Beijing's subsidy practices and global challenges such as climate change and debt relief.

In prepared remarks at the start of two days of bilateral meetings in San Francisco ahead of a summit of Asia-Pacific Economic Cooperation (APEC) country leaders, Yellen said she has worked in recent months to establish an economic dialogue with her Chinese counterparts.

"I hope to build on this strong foundation with an open and substantive discussion over the next two days," Yellen said. "The United States has no desire to decouple from China: A full separation of our economies would be economically disastrous for both our countries, and for the world."

Instead, Yellen said the U.S. seeks a healthy economic relationship with China that benefits both countries over the long term and will raise concerns about Chinese policies that prohibit fair competition.

Yellen's second face-to-face meeting with He since she visited Beijing in July is among a series of cabinet-level engagements that paved the way for U.S. President Joe Biden and Chinese President Xi Jinping to meet on the sidelines of the APEC summit next week.

The Biden administration is hoping to use the meetings in San Francisco to limit the economic fallout from US-Sino tensions and keep the lines of communication open on key issues. U.S. Treasury officials, however, have sought to downplay expectations for any breakthroughs.

In her prepared remarks, Yellen said she looks forward to discussing collaboration on global challenges, from climate change to debt distress in low-income countries, adding that the U.S. and China "have an obligation to lead" on these issues.

She also said she intends to discuss U.S. plans for continued national security restrictions on certain technology exports and on U.S. investment in China.

"The United States will continue to take targeted actions to protect our and our allies' national security. But we are also committed to communicating clearly about these actions to prevent any misunderstandings or miscalculations. And we welcome more clarity on China's thinking and actions," Yellen said.

(Reporting by David Lawder; Editing by Paul Simao)