US-China economy talks resume as Yellen urges maintaining links

Yellen and her Chinese counterparts established two working groups last year after her first visit to the Asian nation since assuming her current role.

Treasury Secretary Janet Yellen urged the next US administration to maintain the dialogue channels that she re-established with China, speaking on the eve of what’s likely to be the last round of economic and financial talks between senior officials from the two nations.

For the world’s two largest economies, “it’s critical to have open channels,” Yellen said in an interview Wednesday with Bloomberg Television. She added that she believed the dialogue would continue to be seen as valuable.

Yellen and her Chinese counterparts established two working groups last year after her first  visit to the Asian nation since assuming her current role. The so-called Economic Working Group is next set to meet Dec. 12 on the sidelines of a Group of 20 deputies meeting in Johannesburg, according to a Treasury spokesperson. The Financial Working Group then has a session Dec. 15-16 in Nanjing, China.

The meetings offer a forum for explaining US concerns, as well as working on shared interests such as combatting a pandemic or climate change — or dealing with potential financial disruptions, Yellen said. The outgoing Treasury chief noted that the US also raises concerns about Russia’s economic policies in its talks with China.

The upcoming round comes as the world prepares for the incoming Trump administration, which is widely expected to escalate tensions with Beijing, particularly through the use of tariffs.

Agenda Items
“The United States and China are the two largest economies on the globe, and 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,” said Jay Shambaugh, the Treasury undersecretary for international affairs.

He added that the Economic Working Group “has also been an invaluable asset to explain our own policies to prevent unnecessary misunderstandings and escalation that could harm American interests and to keep a floor under the relationship.”

This week’s meeting of the financial working group will focus on topics including macroeconomic and financial stability, cross-border data and payments, anti-money laundering and countering the financing of terrorism capital markets issues, and international financial institutions.

The economic group, meanwhile, plans to discuss the two nations’ respective economic outlooks, including China’s recently announced stimulus efforts. The Treasury will also raise its concerns stemming from China’s macroeconomic imbalances and industrial overcapacity, which recent stimulus efforts have not meaningfully addressed, the spokesperson said.

US officials will also raise other issues of concern, including Chinese firms’ support for Russia’s war in Ukraine and recently announced export controls on some critical minerals.