Senior Chinese and US finance officials agree to ‘continue to meet regularly’

Beijing was also willing to promote the development of bilateral relations in a healthy, stable and sustainable direction, the news agency reported.

“Both sides should continue to make good use of the Financial Working Group mechanism, continue to accumulate results and consolidate the momentum of cooperation in the financial field,” He was quoted as saying.

The high-level dialogue comes at a time of serious economic headwinds for China and as the country sees a steep decline in its exports to the US.

Beijing’s challenges can be traced to a harder policy stance adopted by Washington. The Biden administration has moved to restrict US investments in China as it diversifies American supply chains away from the Asian giant.

However, the likelihood of the two sides resolving their differences appears limited, particularly because of political positioning in a US election year, according to Yun Sun of the Stimson Centre, a Washington-based think tank.

Sino-American ties competitive despite being ‘notably stabilised’: US envoy

“There is no illusion that the [Biden] administration could remove things including investment restrictions, tariffs and de-risking measures. In fact, there possibly will be more,” said Sun, observing that “the Chinese understand that”.

“There could potentially be things that Washington will need Beijing to work with it on,” she added, including the purchase of US Treasury bonds as well as stable fiscal and monetary policy, with much depending on “the overall health” of bilateral ties.

The Financial Working Group, launched in September along with an Economic Working Group, aims to serve as a channel to facilitate progress on bilateral financial policy matters. He and US Treasury Secretary Janet Yellen lead the two groups.

US Treasury Secretary Janet Yellen (left) shakes hands with Chinese Vice-Premier He Lifeng during their meeting in Beijing on July 8, 2023. Photo: AP

Officials attending the first meeting of the new working group held in China discussed financial stability and capital markets issues, international financial institutions, sustainable finance, cross-border payments and data, and anti-money laundering and countering the financing of terrorism, according to statements from both sides.

The meeting included a review of technical exchanges that were held between the two sides in December and January on climate stress-testing and respective resolution-planning frameworks for global systemically important banks as designated by the Swiss-based Financial Stability Board of the Bank for International Settlements.

“The two sides had a professional, pragmatic and practical discussion on … issues of major concern to both parties,” according to a statement from the People’s Bank of China, the country’s central bank.

Meanwhile, “US officials also frankly raised areas of disagreement during the conversations”, according to the Treasury readout.

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The PBOC led the meetings in Beijing, during which Pan Gongsheng, China’s central bank governor, attended. Pan was joined by officials from China’s finance ministry, securities regulators and foreign exchange watchdog.

American members of the delegation led by the Treasury Department included representatives from the Securities and Exchange Commission and the Federal Reserve.
Sino-American tensions have risen sharply in recent years amid ongoing trade disputes, a simmering tech war, Washington’s de-risking efforts as well as controversies over Taiwan, which Beijing sees as part of China to be reunited by force if necessary.

Most countries, including the US, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with weapons.

The meeting in November between Xi and Biden was their first face-to-face encounter in a year, and it delivered modest deals on military communication, drug controls and artificial intelligence, hitting a pause on the deteriorating bilateral ties.

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