Apr 6, 2024 - Economy

U.S., China agree to hold more talks about economic concerns

Yellen meets with top China economic official

U.S. Treasury Secretary Janet Yellen with Chinese Vice Premier He Lifeng in Guangzhou, China. (Photo: Ken Ishii/Pool via Getty Images)

GUANGZHOU, China—The U.S. and China committed to hold more talks about key threats to the global economy, including the risk of a glut of cheap China-made goods that the Biden administration warns will slam American companies.

Why it matters: That agreement is the immediate result of hours-long meetings between Treasury Secretary Janet Yellen and her counterpart in China—a very minor step aimed at cooling tensions around overproduction concerns.

  • "The Chinese realize how concerned we are about the implications of their industrial strategy for the United States," Yellen told reporters on Saturday.
  • Yellen said this agreement allows both sides to "continue to listen to one another and see if we can find a way forward that avoids conflict."

Context: Over the past two days, Yellen held extensive bilateral talks with vice premier He Lifeng, an influential Chinese economic official, in the southern city of Guangzhau — the first stop of her China trip.

  • Ahead of those gatherings, Yellen told reporters the Biden administration isn't ruling out measures — including trade barriers—to protect the industries threatened by China.

But the immediate result of Yellen's talks with He stopped far short of that possibility. A senior Treasury official said the bilateral meetings did not include any threats that the U.S. would ramp up trade barriers if China doesn't change course.

  • Yellen and He agreed the countries will hold "intensive" discussions about the importance of balanced growth for the world economy — an initiative Yellen called "significant" in a statement.

What they're saying: "These exchanges will facilitate a discussion around macroeconomic imbalances, including their connection to overcapacity," Yellen said in a statement.

  • The talks, Yellen said, would be "key to allowing us to deepen our understanding of China's policies and continue to express our concerns."

The Treasury Department also said the two sides would create a communication channel so economic officials could "regularly share best practices and updates about our efforts to combat illicit finance."

What's next: Yellen arrived in Beijing early Saturday, where she will meet with Premier Li Qiang, a close ally of China leader Xi Jinping, and other officials.

Go deeper: Yellen: Cutting off economic relations with China isn't "practical"

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