U.S., China agree to forge new economic, financial dialogues

The working groups will hold regular direct meetings for “frank and substantive discussions on economic and financial policy matters,” the Treasury statement said. It added the dialogues would also include and “exchange of information on macroeconomic and financial developments.”

The high-level meetings will be led by Yellen on the U.S. side while China’s economic czar, Vice Premier He Lifeng, will oversee the work led by different agencies in Beijing. U.S. Treasury officials will hold dialogues for the economic working group with Beijing’s Finance Ministry, while the financial talks will take place with representatives from China’s Central Bank.

The new dialogues are part of broader efforts by the White House to reestablish communication channels between Washington and Beijing on a range of geopolitical, security and economic matters following talks between President Biden and Chinese President Xi Jinping in Bali last year. Those efforts have been hampered by hot-button issues, including the discovery of a Chinese spy balloon over the continental United States in February and rolling U.S. trade restrictions aimed at limiting Beijing’s access to U.S. technology.

China speaks of ‘rainbows’ during Yellen visit, but girds for trade battle

Nonetheless, the two sides have made strides this year. After abruptly canceling a visit over the spy balloon furor, Secretary of State Antony Blinken traveled to Beijing in June. Yellen’s visit in July was followed by Commerce Secretary Gina Raimondo in August, where she announced that the two sides had agreed to hold an official ongoing dialogue on commercial issues, beginning in early 2024, drawing in individuals from the private sector with the aim of resolving issues over U.S. commercial access to the Chinese market.

The new dialogues agreed to by Yellen and He appear to have a broader remit, but it is unclear how often the meetings will take place. In Friday’s statement, the Treasury Department said they would happen at a “regular cadence.” Chinese official media released a brief statement confirming the establishment of the working groups that was sparse on detail, but said the group plans to hold “regular and irregular” meetings.

“These Working Groups will serve as important forums to communicate 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,” said Yellen in a statement posted on X, the site formerly known as Twitter, on Friday following the Treasury Department announcement.

Regular high-level economic dialogues between Treasury officials and Beijing were mostly dismantled in 2017, when the Trump administration began implementing sweeping tariffs, trade restrictions and sanctions against Beijing — many of which have remained in place or been extended under the current administration.

Before Yellen’s visit in July, no U.S. treasury secretary had visited Beijing since 2019, when then-Secretary Steven Mnuchin and a team of negotiators conducted limited talks following a total breakdown in discussions months before.

As China’s economy slows, the buck stops with leader Xi Jinping

While the new working groups signal a thawing in the economic relationship, communication between the two sides remains fragile. Beijing routinely expresses skepticism of U.S. commitments and has accused officials in Washington of failing to follow through on high-level discussions. Officials in Beijing maintain that the United States has arbitrarily broadened trade and economic restrictions to contain China’s economic growth under the guise of national and economic security.

Most recently, Beijing accused the United States of ongoing economic “bullying” after Biden in August signed an executive order to establish a screening mechanism for outbound investments and restrict U.S. investment in advanced Chinese technologies, including semiconductors.

“President Biden committed to not seeking to ‘decouple’ from China or halt China’s economic development. We urge the U.S. to follow through on that commitment, stop politicizing, instrumentalizing and weaponizing tech and trade issues,” said Chinese Foreign Ministry spokesman Wang Wenbin following the August announcement.

Yellen and other U.S. officials have sought to push ahead with efforts to reopen channels of communication, while warning that the Biden administration will continue to take targeted actions to protect U.S. national security.

“It is vital that we talk, particularly when we disagree,” said Yellen in her statement on X on Friday.