U.S. Treasury Department Establishes Working Groups to Address China-U.S. Economic Issues
The U.S. Treasury Department has formally announced the establishment of two new working groups aimed at discussing economic and financial matters between China and the United States. This move is seen as a positive step towards improving communication and resolving long-standing conflicts between the two countries. The development follows a visit to Beijing by Treasury Secretary Janet L. Yellen earlier this summer.
For years, the economic relationship between Beijing and Washington has been marred by disputes over sanctions, trade restrictions, and the treatment of Chinese and U.S. companies abroad. These conflicts escalated during the Trump administration, leading to a breakdown in economic dialogues. The newly formed working groups will now hold regular direct meetings to engage in substantive discussions on economic and financial policies. The dialogues will also facilitate the exchange of information on macroeconomic and financial developments.
The high-level meetings will be led by Treasury Secretary Janet L. Yellen on the U.S. side, while China’s Vice Premier He Lifeng will oversee the work carried out by different agencies in Beijing. The U.S. Treasury officials will engage in dialogues with China’s Finance Ministry for the economic working group, while discussions on financial matters will take place with representatives from China’s Central Bank.
These new dialogues are part of broader efforts by the White House to reestablish communication channels with Beijing on various geopolitical, security, and economic matters. President Joe Biden and Chinese President Xi Jinping held talks in Bali last year, but progress has been hindered by contentious issues such as the discovery of a Chinese spy balloon over the United States and U.S. trade restrictions targeting Beijing’s access to American technology.
Nonetheless, there have been some positive developments this year. After a canceled visit due to the spy balloon controversy, Secretary of State Antony Blinken traveled to Beijing in June. Yellen’s visit to China in July was followed by Commerce Secretary Gina Raimondo’s trip in August, during which an ongoing dialogue on commercial issues was established between both sides. These dialogues, agreed upon by Yellen and He, have a broader scope, but the frequency of meetings remains unclear. The Treasury Department stated that they would occur at a “regular cadence,” while Chinese official media mentioned both “regular and irregular” meetings.
Treasury Secretary Janet L. Yellen expressed the importance of these working groups, highlighting that they provide a forum for communication, promote economic competition, and advance cooperation on global challenges. However, communication between the two sides remains fragile, and Beijing continues to voice skepticism regarding U.S. commitments. Chinese officials accuse the United States of broadening trade and economic restrictions without following through on high-level discussions. They argue that these measures limit China’s economic growth under the pretext of national and economic security.
Most recently, Beijing accused the U.S. of ongoing economic “bullying” after President Biden signed an executive order in August to establish a screening mechanism for outbound investments and restrict U.S. investment in advanced Chinese technologies. Chinese Foreign Ministry spokesman Wang Wenbin urged the U.S. to follow through on its commitment not to “decouple” from China or hinder its economic development.
Despite these challenges, Yellen and other U.S. officials remain committed to reopening channels of communication while emphasizing the Biden administration’s determination to protect national security. Yellen stated that dialogue is crucial, especially when disagreements arise.
As the working groups begin their discussions, observers will closely monitor their progress and assess whether they can contribute to a more cooperative and stable economic relationship between China and the United States.