The top US and China economic officials met Wednesday in Zurich, the latest effort to improve contacts and communication between the two global competitors after a period of heightened tensions.
(Bloomberg) — The top US and China economic officials met Wednesday in Zurich, the latest effort to improve contacts and communication between the two global competitors after a period of heightened tensions.
US Treasury Secretary Janet Yellen greeted her Chinese counterpart, Vice Premier Liu He, as the leading political and economic powers seek to revive engagement even as they spar over a number of flashpoints — from technology, trade and debt, to Taiwan and Ukraine.
“We share a responsibility to show that China and the United States can manage our differences and prevent competition from becoming anything ever near conflict,” Yellen said in brief public remarks before the pair met behind closed doors.
“While we have areas of disagreement — and we will convey them directly — we should not allow misunderstandings, particularly those stemming from a lack of communication, to unnecessarily worsen our bilateral economic and financial relationship,” she said.
Liu was also keen to sound a note of optimism, even as he acknowledged tensions.
“We do face problems, but as President Xi said, we only have one planet earth and there are always more solutions than problems,” he said in prepared remarks.
Liu said he looked forward to “serious communication and coordination on macroeconomic affairs, climate change and other issues of mutual interest.”
Read more: US-China Trade Is Near a Record, Defying Talk of Decoupling
The Zurich meeting isn’t expected to resolve any key issues. Any rapport with Liu in his current role will also likely be short lived as he’s expected to step down in the coming months as Xi Jinping appoints a new inner circle. It does, however, mark a modest step forward in a period of renewed engagement that began cautiously last year.
President Joe Biden and Xi held their first face-to-face meeting in November on the sidelines of a Group of 20 summit in Indonesia. Secretary of State Antony Blinken is planning to visit Beijing next month.
“We’re certainly seeing more engagement between the US and China,” Gita Gopinath, the International Monetary Fund’s No. 2 official, told Bloomberg Television’s Francine Lacqua at the World Economic Forum in Davos, Switzerland on Wednesday. “These meetings are critical. These are the two largest economies in the world. It’s important for the rest of the world that they work closely together.”
Reducing Reliance
Yellen has pushed for “friend-shoring” to bolster supply chains by reducing the reliance on China by the US and its allies for critical goods. Meanwhile, the US is trying to deny China access to certain technologies, including advanced semiconductors, leading Beijing to accuse Washington of economic protectionism.
The Biden administration has kept in place a set of tariffs imposed under President Donald Trump and confronted Beijing over what it sees as human rights abuses, unfair trade practices and threats to US national security.
“They’re talking in a way that maybe avoids unintended escalation of tensions,” Rachel Ziemba, senior fellow at the Center for a New American Security, said before Wednesday’s meeting. There are also global issues, such as climate change or developing-nation debt, “that can’t be solved, can’t be addressed, without the US and China talking to each other.”
Yellen has called on China to step up its engagement with multilateral efforts to renegotiate the debts of some of the world’s poorest countries. Her stop in Zurich comes on her way to Africa, where she’ll visit Zambia, which is struggling to restructure $12.8 billion of external debt, one-third of which is owed to China.
Read more: Yellen Takes Biden Strategy to Africa With China as Backdrop
–With assistance from Daniel Flatley.
(Updates with comments from Chinese vice premier starting in fifth paragraph)
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