US sends top Treasury officials to China to discuss economy
By Matt Egan, CNN
New York (CNN) — A team of five US Treasury Department officials is traveling to Beijing this week for a series of meetings on the economy with their counterparts in China, a Treasury official told CNN on Monday.
The trip by senior officials comes ahead of a planned return to China by Treasury secretary Janet Yellen later in 2024.
The high-level US delegation will be led by Jay Shambaugh, Treasury’s under secretary for international affairs.
US officials plan to have frank conversations about China’s trade tactics — a thorny subject that has united many in Washington and that former President Donald Trump has vowed to aggressively attack by imposing massive tariffs. Specifically, the Treasury delegation plans to raise China’s use of non-market economic practices and industrial overcapacity, the official said.
In the past, Yellen has called out China for “unfair” practices, including erecting barriers for foreign firms to enter the coveted market and taking “coercive actions” against American firms.
There are also plans for candid talks on economic developments, including risks to the global economy and fiscal and central bank policies, according to Treasury.
The visit marks the first time that the economic working group is meeting in Beijing since it was launched last September after Treasury Secretary Janet Yellen’s trip to China.
The meetings come at a delicate time as China’s financial markets experience their most serious bout of turbulence in years amid concerns about the country’s economic slowdown. The Shanghai Composite plunged 6% last week, its worst since October 2018, prompting countless social media users to post angry comments on the Beijing-based US Embassy Weibo account. Last week, a court in Hong Kong ordered the liquidation of Evergrande, the world’s most indebted property developer.
However, there is nothing to suggest the latest US-China meeting is in direct response to the renewed concerns about China’s economy and financial markets. This is the third such meeting of the economic working group, which has always been expected to meet regularly.
News of the visit to China was previously reported by The New York Times.
Yellen has made repairing ties between the United States and China a central part of her portfolio. In December, Yellen detailed her plans to build on warming relations between the world’s two largest economies, which includes improving communications, pushing Beijing for greater transparency, ramping up regulatory collaboration and tackling issues like terror financing and the flow of fentanyl.
“But for too long, American workers and firms have not been able to compete on a level playing field with those in China,” Yellen said during a speech at the US-China Business Council’s 50th anniversary dinner. “The PRC deploys unfair economic practices, from non-market tools, to barriers to access for foreign firms, to coercive actions against American companies. These policies harm American workers and firms.”
During an interview with “60 Minutes” that aired on Sunday, Federal Reserve Chairman Jerome Powell acknowledged “challenges” facing China’s economy, including in the real estate market. However, Powell said these troubles may not have a huge impact directly on the United States.
“As long as what happens in China doesn’t lead to significant disruptions in the economy or the financial system,” Powell said, “then the implications for the United States — we may feel them a bit, but they shouldn’t be that large.”
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