US, China to Launch Regular Talks on Economy

Treasury Secretary Janet Yellen delivers remarks during a meeting of the Financial Stability Oversight Council at the U.S. Treasury in Washington, on July 28, 2023. (Kevin Dietsch/Getty Images)

The United States has launched two working groups with China on economic and financial issues to provide a regular policy communication forum between the world’s two largest economies.

The Department of the Treasury and China’s Ministry of Finance will assume the oversight role for the Economic Working Group, while the People's Bank of China will be the Treasury Department’s counterpart for the Financial Working Group.

The groups' members will “meet on a regular cadence" and report to Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng, according to a Treasury Department statement released on Sept. 22.

The groups aim to “provide ongoing structured channels for frank and substantive discussions on economic and financial policy matters, as well as an exchange of information on macroeconomic and financial developments,” the statement reads.

'An Important Step Forward'

Ms. Yellen, on social media platform X, formerly known as Twitter, described the measure as “an important step forward in our bilateral relationship and [it] builds on my visit to Beijing in July.”

During the four-day China trip, the second of four from senior Biden officials since June, Ms. Yellen met with Premier Li Qiang, Mr. He, then-central bank head Yi Gang, current central bank head Pan Gongsheng, and former Chinese Vice Premier Liu He but without reaching any breakthroughs.

U.S. Treasury Secretary Janet Yellen (C) speaks during a lunch meeting with economists in Beijing on July 8, 2023. (Mark Schiefelbein/Pool/AFP via Getty Images)

Ms. Yellen said the working groups will serve as important channels to convey “America’s interests and concerns, promote a healthy economic competition between our two countries with a level playing field for American workers and businesses, and advance cooperation on global challenges.”

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“It is vital that we talk, particularly when we disagree,” she said in the Sept. 22 statement.

China’s Ministry of Finance also released a brief statement announcing the groups' creation, saying the move was to “follow through on the important common understandings reached between the [leaders] of the two countries at their meeting in Bali” in November 2022.

Dialogues and engagement were a decades-long U.S. approach with China until the Trump administration, which adopted a tough-on-China stance. Nor is the concept of working groups with China new. During the Bush administration, Reps. Rick Larsen (D-Wash.) and Darin LaHood (R-Ill) set up a working group in 2005 linking U.S. lawmakers with Chinese leaders. The Treasury Department and the State Department had held annual dialogue meetings with China for a decade until 2017 after President Donald Trump took office.

In late August, Commerce Secretary Gina Raimondo said she and Chinese officials have agreed to a "commercial issues" working group to regularly discuss export control enforcement.

The Bali meeting between President Joe Biden and Chinese leader Xi Jinping on Nov. 14, 2022, marked the first in-person meeting between the leaders of the two countries since President Biden assumed office in 2021. One outcome of the meeting was an agreement between the two sides to “empower key senior officials to maintain communication and deepen constructive efforts” on issues such as climate change, debt relief, health security, and global food security, which welcomed using joint working groups to address bilateral matters.

The Biden administration has repeatedly reiterated that it wants to compete with China rather than to have conflict.

“We’re not looking to hurt China, sincerely,” President Biden told reporters while on a Vietnam trip on Sept. 10. “We’re all better off if China does well—if China does well by the international rules.”

President Joe Biden holds a press conference in Hanoi, Vietnam, on Sept. 10, 2023. (Saul Loeb/AFP via Getty Images)

Contentious Issues

Tariffs, technology, and Taiwan are some areas about which the two countries have sparred.

In April, Ms. Yellen called out the Chinese regime’s human rights abuses in Xinjiang, Hong Kong, and Tibet, while maintaining that she was optimistic about working toward “a future in which both countries share in and drive global economic progress.”

While visiting Beijing in July, she said direct communications can resolve concerns around specific economic practices. She defended U.S. efforts to safeguard national security interests but stressed that these measures shouldn’t worsen bilateral economic relationships.

Multiple high-ranking U.S. officials, including Secretary of State Antony Blinken, climate envoy John Kerry, and national security adviser Jake Sullivan, have recently held meetings with Chinese leadership in their continued efforts to ease tensions.