US sends top Treasury officials to China to discuss economy

US sends top Treasury officials to China to discuss economy

A team comprising five officials from the US Treasury Department is scheduled to journey to Beijing this week for a series of discussions on economic matters with their counterparts in China, as conveyed by a Treasury official to CNN on Monday.

This visit by senior officials precedes a planned trip to China later in 2024 by Treasury Secretary Janet Yellen.

Heading the high-level US delegation will be Jay Shambaugh, the Treasury’s under secretary for international affairs.

US officials intend to engage in candid dialogues regarding China’s trade practices, a contentious issue that has garnered widespread attention in Washington and has been a focal point of former President Donald Trump’s policy agenda, involving the imposition of significant tariffs. Specifically, the Treasury delegation aims to address China’s utilization of non-market economic strategies and industrial overcapacity, according to the official.

Previously, Yellen has criticized China for engaging in “unfair” practices, such as creating barriers for foreign companies seeking entry into the lucrative market and resorting to “coercive actions” against American enterprises.

Additionally, discussions are slated to cover economic developments, encompassing potential risks to the global economy as well as fiscal and central bank policies, as outlined by the Treasury.

This visit signifies the first convening of the economic working group in Beijing since its inception last September, subsequent to Treasury Secretary Janet Yellen’s visit to China.

These meetings occur against a backdrop of heightened sensitivity as China’s financial markets grapple with a significant bout of volatility amid apprehensions regarding the country’s economic deceleration. Last week, the Shanghai Composite index plummeted by 6%, marking its most severe downturn since October 2018, prompting a plethora of disgruntled remarks from social media users on the US Embassy Weibo account based in Beijing. Moreover, a Hong Kong court recently ordered the liquidation of Evergrande, the world’s most indebted property developer.

However, there is no indication that the latest US-China meeting is a direct response to the renewed concerns surrounding China’s economy and financial markets. This marks the third meeting of the economic working group, which was always envisioned to convene regularly.

Yellen has prioritized the task of fostering improved relations between the United States and China. In December, she outlined her plans to build upon the warming ties between the world’s two largest economies, which include enhancing communication, advocating for greater transparency from Beijing, intensifying regulatory cooperation, and addressing issues such as terror financing and the flow of fentanyl.

Nevertheless, Yellen underscored the need to rectify the imbalance in economic relations between the two nations, citing China’s deployment of unfair economic practices that detrimentally affect American workers and businesses.

During an interview with “60 Minutes” aired on Sunday, Federal Reserve Chairman Jerome Powell acknowledged the “challenges” confronting China’s economy, particularly in the real estate sector. However, Powell expressed the belief that these difficulties might not significantly impact the United States unless they lead to substantial disruptions in the economy or financial system, in which case the repercussions for the US would likely be minimal.