US and China agree to hold talks on ‘balanced economic growth’

Treasury Secretary Janet Yellen and her Chinese counterpart, He Lifeng, discussed concerns regarding macroeconomic imbalances, particularly focusing on overcapacity in industries like solar, electric vehicles, and batteries, which the US views as fueled by substantial Chinese subsidies.

Yellen emphasized the need for a level playing field for American workers and firms and highlighted the implications of China's industrial strategy on international trade. Despite China's dismissal of concerns over its state support for industries, Yellen suggested progress was made in finding common ground during the discussions.

Following the talks in Guangzhou, Yellen is set to visit Beijing for further high-level discussions. The visit comes amidst ongoing tensions between the two countries on various fronts, including technological access, Taiwan, and TikTok. Yellen also warned of "significant consequences" if Chinese firms provide support to Russia amid its conflict with Ukraine.

Additionally, both sides committed to cooperating on shared challenges, such as climate finance, debt issues in low-income and emerging economies, and cracking down on money laundering. This commitment includes establishing a financial working group and addressing concerns about the flow of fentanyl and precursor chemicals from China.

Overall, the recent discussions indicate a willingness from both the US and China to engage in dialogue and address economic and shared challenges, despite underlying tensions in their relationship.