WASHINGTON: In a significant effort to stabilize US-China relations before a possible return of Donald Trump to the White House, key economic officials from President Joe Biden’s administration are set to meet with their Chinese counterparts this week.
Treasury Secretary Janet Yellen, in an interview on Wednesday, underscored the importance of “ongoing communications at all levels” to prevent a further deterioration in relations between the world’s two largest economies.
Under Biden’s tenure, economic tensions between Beijing and Washington have resurfaced, driven by trade disputes and illicit fentanyl concerns. These tensions are expected to escalate further if Trump, who has pledged sweeping tariffs on Chinese goods, assumes office in 2025.
“It’s critical to have open channels of communication,” Yellen told Bloomberg Television, warning that Trump’s proposed universal tariffs could provoke significant retaliation from Beijing.
Key Discussions Planned
The upcoming talks will take place on the sidelines of the G20 negotiations in South Africa and later in Nanjing, China. Jay Shambaugh, Treasury Under Secretary for International Affairs, is scheduled to meet Chinese Vice Minister of Finance Liao Min on Thursday to address economic and trade challenges.
Shambaugh emphasized the need for direct dialogue, stating, “The American people expect that we should be able to communicate directly with Chinese officials on both areas where we agree and especially on areas where we don’t.”
Priority Issues
US officials aim to address several contentious issues, including:
- China’s Export Restrictions: Concerns over restrictions on key mineral exports.
- Industrial Overcapacity: Challenges posed by China’s surplus industrial production.
- Macroeconomic Imbalances: The perceived inadequacy of China’s recent policy stimulus efforts.
On Sunday and Monday, the dialogue will expand to a financial working group meeting in Nanjing. The US delegation, led by Treasury Assistant Secretary Brent Neiman, will focus on financial stability and countering threats like fraud and trafficking. Neiman highlighted the importance of collaboration to address global financial risks and illicit activities.
The Chinese delegation will be headed by Xuan Changneng, Deputy Governor of the People’s Bank of China.
Broader Implications
The meetings aim to reinforce communication channels amidst growing economic and geopolitical tensions. With Trump’s proposed trade policies looming, these talks are seen as critical to maintaining stability in US-China relations.
As global markets watch closely, the outcomes of these discussions could shape the trajectory of bilateral relations and economic policies for years to come.
