China, US hold economic talks as trade issues heat up on the campaign trail
BANGKOK– Chinese and U.S. officials have met in Beijing for talks on tough issues dividing the two largest economies as trade and tariffs increasingly draw attention ahead of the U.S. presidential election.
China’s Finance Ministry said Beijing raised objections to higher tariffs on Chinese exports, two-way investment curbs and other restrictions on trade and technology during talks by the country’s Economic Working Group. In a statement, it described the Monday-Tuesday talks as “constructive.”
The talks sent a “positive signal,” the Global Times, a newspaper of China’s ruling Communist Party, said in an article published late Tuesday.
“This positive trend, despite ongoing disputes, provides much-needed reassurance for businesses in the two countries and for the international community amid increasing global challenges,” the report said.
The U.S. Treasury Department said U.S. officials reiterated concerns about Chinese industrial policy practices and overcapacity, and the resulting impact on U.S. workers and businesses.
That reflects concerns that as China’s economy slows, partly due to a prolonged real estate market crisis but also longer-term trends such as an aging population, China’s leaders are likely to rely more heavily on boosting export production to to compensate for weak domestic demand. .
Given China’s already huge market shares in many industries, this could boost capacity to unsustainable levels and push foreign manufacturers out of many industries, some economists say.
Case in point: photovoltaic solar panels, where huge investments mean China has about 80% of the market share for all stages of production, according to a recent report from the International Energy Agency. The rapid rise of Chinese suppliers has led to proposals for import controls in Europe, but these could slow the region’s progress in combating climate change, as well as curb carbon emissions.
The two sides said the talks in Beijing also touched on issues such as debt problems in developing countries, financial cooperation and economic policy.
“US officials reaffirmed that the US is not seeking to decouple the two economies but is instead committed to a healthy economic relationship that provides a level playing field for US businesses and workers,” the Treasury Department said.
Both sides agreed to meet again in April.
Exchanges between the two powers increased last year and gained momentum after President Joe Biden met Chinese leader Xi Jinping at a November summit in San Francisco, California.
But despite the slight improvement in relations, tensions remain high, especially over Taiwan. Biden has kept in place most of the tariffs on Chinese imports that former President Donald Trump imposed when he launched a trade war in 2018.
His government has also tightened controls on Chinese access to advanced computer chips and the technology to make them, along with other strategically sensitive know-how.
Reports that Trump would raise tariffs even further if elected have shaken fragile investor sentiment in China, where financial markets are in the midst of a prolonged slump.
The meeting of the Economic Working Group was the third since its establishment in September and the first in Beijing. A Treasury Department delegation met in Beijing with Chinese Vice Premier He Lifeng and conveyed the message that Yellen hoped to visit China at an “appropriate time.”