Chinese, US finance officials agree: meet regularly for economic talks

TLDR:

• Senior finance officials from China and the US agree to continue communication and deepen engagement after two days of meetings in Beijing.
• Bilateral policy matters like financial stability, capital markets issues, and anti-money laundering were discussed at the meeting.

Senior Chinese and US finance officials have pledged to continue communication and deepen engagement after a two-day meeting in Beijing. The Financial Working Group, launched in September, aims to facilitate progress on bilateral financial policy matters. Both sides agreed to continue meeting regularly, with Vice-Premier He Lifeng stating that China is willing to work with the US to implement the important consensus reached in San Francisco. He also expressed China’s willingness to promote healthy, stable, and sustainable bilateral relations. However, it is unlikely that the two sides will resolve their differences, especially in a US election year.

The high-level dialogue took place amidst China’s economic headwinds and a decline in its exports to the US. The Biden administration has adopted a harder policy stance towards China, restricting US investments in the country and diversifying American supply chains away from China. Yun Sun of the Stimson Centre has noted that there is no expectation for the Biden administration to remove investment restrictions, tariffs, and de-risking measures. The Chinese understand this and there may be areas where Washington needs Beijing’s cooperation, such as the purchase of US Treasury bonds and stable fiscal and monetary policies.

The Financial Working Group discussed various financial policy matters, including financial stability, capital markets issues, sustainable finance, cross-border payments and data, and anti-money laundering. The discussions also included technical exchanges on climate stress-testing and resolution-planning frameworks for global systemically important banks. Both sides had a professional and practical discussion on major concerns.

Sino-American tensions have risen in recent years due to trade disputes, a tech war, de-risking efforts, and controversies over Taiwan. The meeting in November between Chinese President Xi Jinping and US President Joe Biden delivered modest deals on military communication, drug controls, and artificial intelligence. However, the overall bilateral ties remain uncertain.