22nd September 2023 – (Washington) In a bid to alleviate tensions and strengthen bilateral relations, the U.S. Treasury Department and China’s Ministry of Finance have established two economic working groups. Led by Treasury Secretary Janet Yellen and Vice Premier He Lifeng, these groups will focus on economic and financial matters.
The primary goal of these working groups, as highlighted by Yellen in a series of tweets, is to establish a consistent and effective channel of communication between the world’s two largest economies. Yellen emphasised that these groups will serve as crucial platforms to address American interests and concerns, foster healthy economic competition, and ensure a level playing field for American businesses and workers.
The formation of these groups follows a series of high-profile visits by U.S. administration officials to China throughout the year. These visits have set the stage for a potential meeting between President Joe Biden and Chinese President Xi Jinping in November during an Asia-Pacific economic conference in San Francisco.
The United States and China share a significant trade relationship, but economic competition between the two nations has intensified in recent years. To enhance cooperation, the finance ministers of both countries have agreed to meet regularly, according to a news release from the Treasury Department.
Yellen, along with other senior officials from the Biden administration, visited China this year, following President Biden’s directive to maintain communication and deepen constructive efforts after his meeting with President Xi in Bali last year.
The launch of these working groups also comes on the heels of a meeting between Secretary of State Antony Blinken and China’s vice president on the sidelines of the U.N. General Assembly.
It is worth noting that establishing working groups between the U.S. and China is not a novel concept. In 2005, Representatives Rick Larsen (D-Wash.) and Darin LaHood (R-Ill.) established a working group between lawmakers from both countries. More recently, in August, Commerce Secretary Gina Raimondo pledged to establish a working group comprising officials and representatives from the private sector to address trade and investment issues.
Disagreements between the U.S. and China have encompassed areas such as tariffs, technology, and China’s territorial claims in self-governing Taiwan, as well as large parts of the South and East China Seas.
Tensions escalated earlier this year when a Chinese surveillance balloon entered sensitive U.S. airspace. The U.S. military intercepted and shot down the balloon off the Carolina coast, as it had traversed sensitive military sites across North America. China claimed that the incident was an accidental flyover by a civilian aircraft and issued threats of retaliation.
In April, Yellen criticised China’s business practices and human rights abuses in regions like Xinjiang, Hong Kong, and Tibet. However, she also expressed her belief in a future where both countries could contribute to and benefit from global economic progress.
Relations between the U.S. and China have further strained due to China’s growing ties with Russia, despite Russia’s ongoing invasion of Ukraine.
Last year, the U.S. took measures to restrict exports of advanced computer chips to China. The aim was to limit China’s ability to develop advanced military systems, including weapons of mass destruction, as stated by officials from the U.S. Commerce Department in October.