Top US and China officials vow to enhance communication after 'frank' economy talks

US Secretary of the Treasury Janet Yellen met China's Vice Premier Liu He for their first face-to-face bilateral

US Treasury Secretary Janet Yellen and China's Vice Premier Liu He in Zurich on Wednesday. EPA
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US Treasury Secretary Janet Yellen on Wednesday vowed to "deepen communication" with Beijing in a face-to-face meeting with her Chinese counterpart Vice Premier Liu He.

The leaders' first in-person meeting lasted for more than two and a half hours in Zurich as delegates were gathering 150km away for the World Economic Forum in Davos.

Washington released a readout from that meeting, signalling that Ms Yellen plans to visit China soon.

"We share a responsibility to show that China and the United States can manage our differences and prevent competition from becoming anything ever near conflict," Ms Yellen said before the talks.

Mr Liu echoed the need for co-operation between the world's largest economies.

“No matter how circumstances change, we should always maintain dialogue and exchanges,” he said.

Washington said the discussions were "frank", especially in areas where the two countries' interests compete.

Mr Liu expressed concern over Washington's economic, trade and technology policies towards Beijing in particular, China’s official Xinhua News Agency reported.

The US imports more from China than any other country, while China is one of the largest export markets for US goods and services. American companies earn hundreds of billions of dollars annually from sales in China.

However, that relationship has come with some conflict. Washington is increasingly worried about Chinese efforts to acquire sensitive US tech to achieve Beijing’s industrial policy goals and bolster its military.

US officials have accused Beijing of requiring American companies to share their technology as a condition of doing business in China, known as "forced technology transfer".

At the World Economic Forum this week, US climate envoy John Kerry signalled hope that tensions could thaw and help to enhance the global fight on climate and other issues.

“We very much hope to be able to find the pathway to a breakthrough that could make a huge difference,” Mr Kerry told CNBC’s Tania Bryer at the global conference.

Ms Yellen and Mr Liu agreed to enhance co-operation on climate finance, including within the UN, G20 and Apec, as well as "through support for emerging markets and developing countries in their clean energy transitions", Washington said.

The meeting comes as both countries are facing unique economic challenges at home.

High interest rates have increased pressure on debt-burdened nations that owe great sums to China.

Additionally, Beijing's economy is beginning to reopen after a drastic resurgence of Covid-19, and the US is slowly beginning to recover from record inflation.

The World Bank reported last week that the global economy would come “perilously close” to a recession this year, led by weaker growth in all the world’s top economies — including the US and China.

"Both sides agreed it is important for the functioning of the global economy to further enhance communication around macroeconomic and financial issues," Washington's readout of the meeting said.

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Updated: January 18, 2023, 6:26 PM