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A working group of US Treasury and Chinese officials will meet this week in Beijing for the first time, in another sign of closer engagement between the countries following November’s summit between Joe Biden and Xi Jinping.
The two sides will meet in the Chinese capital on Thursday, according to a Treasury official. The group has met twice since its creation last September following Treasury secretary Janet Yellen’s first visit to China.
The official said they would discuss topics ranging from financial stability and cross-border data regulations to capital markets, sustainable finance and anti-money laundering. They will also talk about financial terrorism, an issue that will include talks on counter-narcotics co-operation, and their views on IMF policies.
“This trip underscores Secretary Yellen and the Biden administration’s commitment to establishing resilient channels of communication between the United States and China,” said a Treasury official.
In the two months since Biden and Xi agreed to try to stabilise relations, the countries have boosted engagement in several areas. US and Chinese military officials last week held their first meeting since 2021.
Liu Jianchao, head of the Communist party’s international department and possible future foreign minister, last week met secretary of state Antony Blinken, national security adviser Jake Sullivan and his deputy Jon Finer.
While the countries have eased tensions, they remain at loggerheads over many issues including China’s stance on Russia’s full-scale invasion of Ukraine.
Speaking at the World Economic Forum in Davos this week, Sullivan said: “With China’s help, [Vladimir] Putin is mobilising Russia’s defence industrial base, putting the country’s economy on a wartime footing.”
China is also unhappy with a series of moves by the US to control exports of sensitive technology, particularly in the area of chips and artificial intelligence. But Yellen has previously stressed to her Chinese counterparts that Washington will not balk from taking national security measures where warranted.
The two powers also have deep differences over Taiwan, where voters last week elected as president Lai Ching-te, who China considers a dangerous separatist. Also speaking at Davos, Blinken said China bore some blame for what it sees as unfavourable outcomes in Taiwan by exerting pressure on the country.
The Treasury team will be led by Brent Neiman, assistant secretary for international finance, and under-secretary for domestic finance Nellie Liang. They will be joined by Andrea Gacki, head of the financial crimes enforcement network, who will first visit Hong Kong for talks with financial institutions about illicit finance and compliance.
The Chinese team will be led by Xuan Changneng, deputy central bank governor.
Ma Wei, a researcher at the CASS institute of American studies in Beijing, said China’s main aim was to revive communication with Treasury after three years of Covid-19 restrictions shut down the talks. He said Beijing would likely focus on the “Section 301” tariffs levied by the Trump administration on China that Biden has not lifted, saying Chinese negotiators hoped Treasury would convey its concerns to the US Trade Representative.
Ma said the Chinese side would probably also seek more details on Biden’s new restrictions on US outbound investment in Chinese high-tech companies, such as what kind of companies would be on the list and what the limits on American investors would be. Treasury is finalising regulations following an executive order from Biden last year.
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