The Biden administration is sending a high-level delegation of Treasury Department officials to Beijing this week for a series of economic negotiations as the world’s largest economies seek to continue the engagement efforts that President Biden and his Chinese counterpart , Xi Jinping, agreed to continue last year. .
A Treasury official, speaking on condition of anonymity because the trip was not publicly announced, said the two days of meetings would include “frank conversations” about China’s use of non-market economic practices. such as government subsidies. U.S. officials also plan to raise concerns about industrial overcapacity, which could flood international markets with cheap goods.
They will also discuss ways to reduce the sovereign debt burden that weighs on low-income countries and prevents some of them from investing in sustainable development and climate initiatives. China is one of the world’s biggest creditors and has faced international pressure to make concessions that would unlock a global effort to restructure hundreds of billions of dollars of debt owed by poor countries.
More broadly, the two governments will discuss the macroeconomic prospects of their countries, whose economies are essential to the health of the global economy as a whole. The United States is proving to be the most resilient economy in the world. China, meanwhile, continues to be haunted by a financial sector struggling to contain huge amounts of local government debt, a volatile stock market and a crisis in its real estate sector.
Last week, the International Monetary Fund, in its latest economic outlook, projected that China’s economy would grow 4.6% in 2024, a faster pace than previous projections. But he also urged China to make longer-term structural changes to its economy, such as an overhaul of its pension program and reform of its state-owned enterprises, to avoid a more dramatic slowdown in output.
“Without these reforms, there is a risk that Chinese growth will fall below 4 percent,” IMF Managing Director Kristalina Georgieva told reporters on Thursday.
U.S. and Chinese officials will also discuss mutual efforts to combat climate change and the mechanisms of investment screening programs that create new economic barriers between the two countries.
Reviving a formal economic dialogue structure aims to prevent misunderstandings between the United States and China from escalating into economic war.
The five-person Treasury group will be led by Jay Shambaugh, the department’s undersecretary for international affairs. This is the first such meeting in Beijing of the economic working group established last September. In January, a group of Treasury officials, focused on financial issues, held talks with Beijing.
The visit could pave the way for a second trip to China by Treasury Secretary Janet L. Yellen, who visited Beijing last summer.
The Biden administration has tried to persuade Chinese officials that President Biden’s efforts to diversify U.S. supply chains away from China are not intended to harm Beijing’s economic development.
The Treasury official did not say what specific concerns Mr. Shambaugh would raise with his counterparts during the trip. But Biden administration officials have continued in recent months to complain about China’s attitude. subsidies for its domestic industries And discrimination against foreign competitors.
In a speech to the U.S.-China Business Council in December, Yellen lamented that China continues to use unfair economic practices, limit access to foreign companies, and coerce U.S. businesses.
“For too long, American workers and businesses have not been able to compete on a level playing field with those in China,” Ms. Yellen said.
Although increased levels of engagement appear to have eased some public displays of tension between the United States and China, it is unclear how much progress has been made in practice.
The Biden administration last August advanced plans to adopt new rules aimed at restricting U.S. investment in certain Chinese sectors that the United States considers national security risks. Two months later, China announced it would restrict exports of graphite, an important component of electric vehicle batteries.
But both countries say they want to continue looking for areas of collaboration.
“These trips have enormous importance in preventing any further escalation of hostilities, particularly as election rhetoric in the United States intensifies,” said Eswar Prasad, a professor at Cornell University and former head of the China division of the International Monetary Fund. “I think both sides are very keen to stem any further escalation of hostilities. »
