Top Treasury officials visiting Beijing seeking to ease Sino-US economic tensions

The Treasury will send officials to China this week to discuss a variety of economic issues. Talks will focus on business and market practices that have put the superpowers at odds.

The Treasury envoy will visit China this week as the two giants work to resolve economic tensions following last year’s agreements between Joe Biden and Xi Jinping.

The two-day bilateral talks will cover a wide variety of issues, including government subsidy policies and concerns over a glut of low-cost products on the market.

The talks, which have yet to be publicly revealed, will also address China’s standing as one of the world’s top borrowers to developing market economies, as well as methods to assist countries with their sovereign debt loads so that they can engage in climate projects.

Last September, Biden and Xi agreed to increase cooperation on economic topics to help lessen the tension on the two countries’ relationship that has grown in recent years.

The Treasury delegation to Beijing will be led by Jay Shambaugh, the department’s Under Secretary for International Affairs. The discussion might create the framework for Treasury Secretary Janet Yellen’s second trip to China, following her visit last summer.

Officials in China have been battling with an ailing economy, pushing the government to consider a $278 billion rescue plan to stabilise the stock market, a $140 billion liquidity injection to reenergize the banking system, and new steps to prevent additional damage to the property industry.

China’s excess capacity issues will also be reviewed at the meeting. The country’s slow demand, combined with oversupply, has impacted a variety of industries, including chemicals, ferrous and non-ferrous metals, and newer areas such as renewable energy.

Furthermore, officials from both countries will meet to discuss coordinated measures to address climate change, according to the newspaper.

Many Wall Street forecasts are gloomy on China due to its slower-than-expected recovery from the COVID-19 pandemic, with property sector turmoil being a particular focus. The real estate crisis worsened last week when a Hong Kong court ordered Evergrande to liquidate following years of restructuring attempts.

The forthcoming conference will be the first in Beijing for the economic working group, which was established last September. In January, a Treasury group focused on financial concerns met in Beijing.