The United States has launched new economic and financial working groups with China as the two major powers seek to deepen communication amid intensifying competition.
The US Treasury Department said on Friday that the working groups are headed by Finance Minister Janet Yellen and China’s Deputy Prime Minister He Lifeng and will meet regularly.
The two working groups will continuously provide structured channels for open and substantive discussions on economic and financial policy issues, as well as an exchange of information on macroeconomic and financial developments, the ministry said in a statement.
The announcement came after Yellen visited China in July to help stabilize U.S. President Joe Biden’s administration’s relations with Beijing.
Relations between China and the United States have deteriorated in recent years on a number of issues, from trade and the status of Taiwan, to China’s expansive claims in the South China Sea, to ongoing American pressure against the growing Chinese influence in the Indo-Pacific.
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However, senior members of the Biden administration have stated that they are trying to manage these tensions and do not seek confrontation with China.
In a social media post on Friday, Yellen said the new working groups were an important step forward in our bilateral relations and continued their four-day trip to China two months ago.
My trip to China was aimed at establishing a permanent communication channel between the two largest economies in the world, in accordance with the instructions of President Biden after his meeting with President Xi in Bali. “It’s important that we talk, especially if we disagree,” she said.
U.S.-China relations reached their lowest point in years in February when American forces shot down a balloon that Washington said was being used by Beijing to spy on its territory.
Today’s announcement of the establishment of Economic and Financial Working Groups between the Treasury Department and counterparts in China is an important step forward in our bilateral relationship and builds on my visit to Beijing in July. https://t.co/Bedf7TChlN
— Secretary Janet Yellen (@SecYellen) September 22, 2023
China rejected the accusation, saying that the balloon was a civilian airship used for weather research and deviated too far from its planned course.
The episode followed a visit to Taiwan last year by Nancy Pelosi, the then speaker of the U.S. House of Representatives, who made her the highest-ranking American politician to visit the island, which Beijing has claimed as its own territory for more than two decades.
Since the balloon incident, the two sides have resumed their high-level contacts, with U.S. Secretary of State Antony Blinken visiting Beijing a few weeks before Yellen’s trip.
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However, the Biden administration has continued to impose restrictions on trade with China in areas that it considers crucial for national security, including high-end semiconductors.