US, China agree to hold talks on 'balanced economic growth'
by AFP Staff Writers
Guangzhou (AFP) April 6, 2024

The United States and China have agreed to hold "intensive exchanges on balanced growth", the US Treasury Department said in a statement, after two days of talks between Treasury Secretary Janet Yellen and her Chinese counterpart He Lifeng in Guangzhou.

The planned talks mark the latest step forward in joint efforts to stabilise rocky ties between the world's two leading economies since a meeting between presidents Joe Biden and Xi Jinping last November.

"These exchanges will facilitate a discussion around macroeconomic imbalances, including their connection to overcapacity, and I intend to use this opportunity to advocate for a level playing field for American workers and firms," said Yellen in a separate statement on Saturday.

Overcapacity is seen by the United States as huge Chinese subsidies -- to industries such as solar, electric vehicles and batteries -- risking a surplus of cheap goods that threatens those sectors elsewhere.

After warning Friday that China's overcapacity could pose risks to economies around the world, Yellen told the media that she discussed the issue for "more than two hours" during Saturday morning talks with He.

Beijing has dismissed concerns over its vast state support for industry, last month condemning an EU probe into its subsidies for EVs as "protectionism" and part of a Western effort to politicise international trade.

But Yellen suggested Saturday that some progress had been made in getting the two sides to see eye-to-eye.

"I think the Chinese realise how concerned we are about the implications of their industrial strategy for the United States, for the potential to flood our markets with exports that make it difficult for American firms to compete, and that other countries have the same concern," said Yellen.

"It's not going to be solved in an afternoon or a month," she said, hailing the agreement for fresh talks for "(providing) a structured way in which we can continue to listen to one another and see if we can find a way forward that will avoid conflict".

- Beijing-bound -

Yellen now heads north to Beijing, where she will have a two-day visit involving more high-level discussions with Chinese leaders.

This visit to China -- her second in the past year -- comes as Washington and Beijing feud over everything from access to advanced technology, the self-ruled island of Taiwan and video app TikTok.

The US treasury secretary also warned Saturday of "significant consequences" if Chinese firms aid Russia, whose February 2022 invasion of Ukraine has not been condemned by Beijing.

"Secretary Yellen emphasized that companies, including those in the PRC, must not provide material support for Russia's war against Ukraine, including support to the Russian defense industrial base, and the significant consequences if they do so," the US Treasury said in a statement, referring to the People's Republic of China.

"We've been clear with China that we see Russia as gaining support from goods that China, Chinese firms are supplying to Russia," Yellen told journalists in Guangzhou.

"Neither of us want this to be an issue with our bilateral relationship. So we're working together," she said.

- 'Shared challenges' -

The US Treasury readout also said the two sides had made a "commitment to work together on shared challenges, including climate finance and debt issues in low-income and emerging economies".

They agreed to explore ways to step up a joint crackdown on money laundering through exchanges under a US-China "financial working group", with a first meeting to be held "in coming weeks", the statement said.

The exchange comes after repeated calls by Washington for Beijing to stem the flow of fentanyl and related precursor chemicals from plants in China, often sold via illicit financial transactions to buyers in North America.

Biden and Xi agreed to cooperate on the issue of drug trafficking during their summit in November, with the two governments holding several related working meetings since then.

Relations have stabilised somewhat since the two top leaders met in San Francisco for talks that both sides described as a qualified success.

Yellen's July 2023 visit helped restart dialogue after a period of heightened tensions, notably over Taiwan, and culminated in the launching of bilateral working groups on economic and financial policy.

US hails closer approach with EU against China
Leuven, Belgium (AFP) April 5, 2024 - US Secretary of State Antony Blinken on Friday hailed "increasing alignment" between Brussels and Washington in their approach towards China, especially in the fields of microchips and green technology.

"What we've seen over the last three years is increasing alignment in our approaches to these issues. And when the United States and the European Union are aligned, when we're working in common purpose... it makes a big difference," Blinken said after attending an EU-US meeting on trade and technology in Belgium.

The EU-US meeting is a forum for the big economies on each side of the Atlantic to hammer out their differences and to lay groundwork for the formulation of joint Western positions in the trade and technology spheres.

Together, the EU and United States represent around a third of global GDP, while China represents some 16 percent, calculated on purchasing power parity.

In nominal terms, the EU and United States together account for some 44 percent of global GDP, and China around 18 percent.

While Washington has taken a more aggressive stance against Chinese imports in several areas -- much of which is guided and backed by the deep-pocketed Beijing government -- Brussels maintains it is pursuing a more prudent "de-risking" strategy of lessening reliance on Chinese products.

On Friday, during a visit to China, US Treasury chief Janet Yellen warned that Beijing's subsidies for industry could pose a risk to global economic resilience.

She expressed concerns about China's "overcapacity" undercutting American and other countries' companies.

Following the EU-US meeting in Belgium, EU trade commissioner Valdis Dombrovskis highlighted the "economic clout" transatlantic cooperation brings to "developing resilient supply chains in the area of semiconductors".

"It's very clear that in... very complicated geopolitical circumstances, it's actually very important that EU and US work together as strategic allies," he said, without naming China.

The European Union's antitrust chief, commissioner Margrethe Vestager, said Brussels forged its own stance and that was presented during the meetings with US counterparts.

"I think that strengthens us -- it is not against someone. It is really pro-cooperation, and I think we have actually delivered," she said.

Related Links
Global Trade News