US, China agree to new economic dialogue format

The regular talks aim to give the two countries a venue to resolve their differences.

The U.S. States and China have created a new structure for economic dialogue in an effort to improve communication between the world's largest economies and stabilize a relationship that has become increasingly tense in recent years.

The Treasury Department said Friday that the United States and China have agreed to create economic and financial working groups that will meet regularly to discuss policy and exchange information. The announcement follows visits to Beijing by three members of President Biden's cabinet over the summer, intended to ease tensions over economic and geopolitical issues that have been festering for years between the two countries.

The Treasury Department said the new working groups would create “ongoing structured channels for frank and substantive discussions.” Treasury officials will report to Secretary Janet L. Yellen, who visited Beijing in July. Representatives from China, the Ministry of Finance and the People's Bank of China, will report to Vice Premier He Lifeng.

“These working groups will serve as important forums for communicating the American position. interests and concerns; promote healthy economic competition between our two countries with a level playing field for American workers and businesses; and advance cooperation in the face of global challenges,” Yellen said in a statement.

The United States and China still have major economic disagreements over tariffs customs, technological controls and restrictions on investments. The Biden administration has recently expressed particular concern about the treatment of American companies operating in China.

The creation of a working group directly linking the Department of Treasure Chinese officials on economic and financial issues represent a revival of a decades-long approach to bilateral relations that was dismantled under President Donald J. Trump.

"These are issues where the United States and China clearly see mutual benefit in mitigating conflict and managing bilateral relations constructively,” said Eswar Prasad, former head of the China division of the International Monetary Fund. “These working groups could also help maintain dialogue on these issues, even as geopolitical fissures between the two sides continue to deepen. »

He added: “The formation of these working groups is unlikely to lead to a significant de-escalation of trade and economic tensions, but it will at least reduce less risk of further escalation, particularly as the US political season heats up. »

Congress removed Treasury authority over trade relations in the 1970s, transferring that authority to the newly created Office of the United States Trade Representative, which also became an agency of the firm. Congress acted on complaints from American industries and unions that the Treasury and State Department had made trade concessions to other countries to gain allies against the Soviet Union during the Cold War.

Under Presidents George W. Bush and Barack Obama, Treasury led interagency negotiating teams in negotiations with China. Treasury leadership has limited the influence of U.S. trade officials, as a succession of Treasury secretaries have placed a high priority on coordinating economic policies with China and opening China's financial markets to Wall Street firms.

Mr. Trump dismantled the interagency working group system and said each agency would negotiate separately with China. Vice Premier Liu He, Vice Premier He Lifeng's predecessor in international economic policy, repeatedly attempted to strike trade deals with then-Treasury Secretary Steven T. Mnuchin, bypassing Robert E. Lighthizer, who was Mr. Trump’s trade representative. .

But Mr. Trump did not approve of these arrangements and instead supported Mr. Lighthizer, who ended up negotiating a limited trade agreement signed by the two countries in January 2020, and remains in place.

In August, Gina M. Raimondo, Secretary of Commerce, announced