In an effort to alleviate economic and geopolitical tensions, the United States and China have formed a new framework for regular economic dialogue, announced by the US Treasury Department on Friday. The two largest economies in the world have agreed to establish economic and financial working groups aimed at facilitating policy discussions and information exchanges.
The decision follows a series of visits to Beijing by three cabinet members of President Biden's administration during the summer. The visits were intended to mitigate longstanding issues between the two nations.
The new working groups will provide structured channels for open and substantive discussions, with officials reporting directly to US Treasury Secretary Janet L. Yellen. On the Chinese side, representatives from the ministry of finance and the People’s Bank of China will report to Vice Premier He Lifeng.
Despite this progress, significant disagreements remain between the US and China on issues such as tariffs, technology controls, investment restrictions, and the treatment of American companies operating in China.
The formation of these working groups signifies a return to a strategy of direct engagement between the Treasury Department and Chinese officials on economic and financial matters, a method abandoned during President Donald J. Trump's tenure. Eswar Prasad, former head of the International Monetary Fund’s China division, stated these working groups could help maintain dialogue on key issues even as geopolitical rifts potentially deepen, as reported in the New York Times.
In August, Commerce Secretary Gina M. Raimondo revealed that the US and China agreed to hold regular discussions about commercial issues and restrictions on access to advanced technology.
The new working groups, which will involve consultation with the Office of the United States Trade Representative on trade matters, were agreed upon during Secretary Yellen's July trip. The economic group will tackle issues like debt restructuring for distressed low- and middle-income countries, while the financial group will focus on financial stability and sustainable finance.
Secretary Yellen underscored that the new framework represents a significant advancement in bilateral relations. She highlighted the importance of dialogue, especially in areas of disagreement.
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