TMTPost -- U.S. Treasury Secretary Janet Yellen concluded her six-day visit to China with three progresses made on economic and financial cooperations.

Credit：Xinhua News Agency

The U.S.-China relationship is on stronger footing today than a year ago, which resulted from intensified diplomacy with China including substantive, in-depth economic conversations of the Economic and Financial Working Groups, Yellen said in her speech delivered at a press conference about her trip to China on Monday. The Secretary said she met in person with Chinese Vice Premier He Lifeng three times over the past year, and her team through exchanges of the Economic and Financial Working Groups, has set forth its own economic policy priorities, gained an improved understanding of China’s, directly communicated American national security concerns, and both countries have clarified potential misunderstandings to prevent unintentional escalation.

As to the recent trip of Yellen and her team in China, she said they made significant progress on three areas. The first is Vice Premier He and her agreed to launch intensive exchanges on balanced growth in the domestic and global economies. Yellen believes such exchange represents an important part of her effort to advocate for American workers and businesses and gain a better understanding of certain Chinese macroeconomic policies. During conversations in the trip, Yellen underscored again that the United States does not seek to decouple from China. Noting that China is a key market for American products and services, Yellen said the American businesses that she spoke to in Guangzhou underscored the significant benefits of a healthy economic relationship.

In the same time, Yellen expressed concern to senior Chinese officials that there are features of the Chinese economy that have growing negative spillovers on the U.S. and the globe, especially China’s macroeconomic imbalances, namely its weak household consumption and business overinvestment, which could impose material risk to foreign workers and businesses. Yellen also raised concern over industrial overcapacity. “China is now simply too large for the rest of the world to absorb this enormous capacity,” Yellen said. “Actions taken by the PRC today can shift world prices. And when the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign firms is put into question.” She said the concerns will not be resolved in short run, but exchanges will provide a dedicated structure for U.S. to raise our concerns about China’s imbalances and overcapacity, and U.S. intends to underscore the need for a shift in policy by China during these talks.

The second progress is that U.S. and China will expand cooperation in shared work against illicit finance. A new Joint Treasury- PBOC Cooperation and Exchange on Anti-Money Laundering, was established during this trip. The third progress is that leaders of U.S. and China will continue a series of financial technical exchanges between the two countries. Specifically, they will hold upcoming exchanges on operational resilience in the financial sector and on financial stability implications from the insurance sector’s exposure to climate risks.

In addition to these progresses, Yellen said she also had difficult conversations about national security. She stressed that any international firms, including those in China, must not provide material support for Russia’s war and that they will face significant consequences if they do, and any banks that facilitate significant transactions that channel military or dual-use goods to Russia’s defense industrial base expose themselves to the risk of U.S. sanctions. Yellen also had exchanges on the use of economic tools in the national security space. She believes U.S. and China must continue to discuss how each side defines national security in the economic sphere.

China and the United States have reached important consensus on economic and financial cooperation during Yellen’s visit, said Chinese  Vice Finance Minister Liao Min during a press briefing on Monday.

In the economic field, the two sides agreed to hold in-depth discussions on balancing the growth of the two countries and the global economy, and are willing to further strengthen economic exchanges and cooperation. They also agreed to maintain communication on issues, such as debt handling of developing countries as well as the strategic reform of international financial institutions under multilateral channels, such as G20, and advance cooperation on jointly addressing global challenges.

In the financial field, both sides agreed to carry out continuous exchanges and cooperation on issues including financial stability, sustainable finance, anti-money laundering and countering terrorist financing. 

"China always adopts an open and positive attitude towards this," Liao said. In the next stage, China is ready to work with the United States to translate the above consensus into practical cooperation outcomes under the China-U.S. economic and financial working group, according to Liao.