The United States and China have agreed to hold talks addressing America’s concerns about China’s economic model. Treasury Secretary Janet Yellen announced that the two sides will engage in intensive exchanges focused on promoting more balanced economic growth. The discussions will also cover combating money laundering. Yellen emphasized the importance of addressing American concerns about manufacturing overcapacity in China, which could potentially flood U.S. markets with exports and impact American firms’ competitiveness.
Chinese state media reported that the discussions will involve topics such as balanced economic growth, financial stability, sustainable finance, and cooperation in countering money laundering. China expressed concern over American trade and economic measures that restrict Chinese exports. Government subsidies and policy support in China have led to an oversupply of solar panels and electric vehicles, sparking price wars and threatening American and European jobs. Yellen highlighted the significance of finding a way forward that avoids conflict and maintains a positive bilateral relationship.
Yellen acknowledged the joint efforts between the U.S. and China in addressing U.S. concerns about Chinese companies selling goods to Russia following its invasion of Ukraine. The talks on balanced growth and money laundering will be conducted within existing economic and financial working groups established after Yellen met with Chinese Vice Premier He Lifeng in July. While there are hopes for progress in cooperation, earlier state media coverage had raised concerns about U.S. motives, suggesting that the U.S. may use overcapacity concerns as a pretext for implementing protectionist policies such as tariffs.
The U.S. government has taken steps to strengthen its domestic manufacturing capabilities and lessen its reliance on certain Chinese technologies. Legislation such as the CHIPS and Science Act aims to boost the semiconductor industry and scientific research to create more high-tech jobs in the U.S. In addition, President Joe Biden signed an executive order to regulate investments going toward China. Yellen’s visit to Beijing will involve meetings with senior officials and economists to further discuss economic issues and potential cooperation between the U.S. and China.
Yellen emphasized the need for continued dialogue and cooperation between the two countries, stating that resolving issues such as overcapacity and trade tensions is crucial for maintaining a positive bilateral relationship. While challenges remain, both sides are hopeful that structured exchanges and discussions will lead to mutually beneficial outcomes. The talks between the U.S. and China mark an important step in addressing economic concerns and fostering a more stable and cooperative relationship between the two global powers. Yellen’s visit to China signifies a commitment to addressing economic challenges and finding common ground for future cooperation.
