U.S Treasury Secretary Janet Yellen and Chinese Vice Premier Liu He pledged at a meeting Wednesday in Zurich to work together to resolve climate financing issues and keep the lines of communication open between the world’s two biggest economies.
Speaking to reporters at the start of their talks, Yellen said despite “areas of disagreement,” the two countries have a responsibility to manage their differences and “prevent competition from becoming anything near conflict.”
Liu said China was ready to work with the United States “to maintain dialogue and exchanges” and seek common ground.
Yellen’s face-to-face meeting with Liu was the highest-ranking contact between the two countries since U.S. President Joe Biden met with Chinese President Xi Jinping in Bali in November.
After the Zurich meeting, the U.S. Department of the Treasury said the two officials agreed that the U.S. and China would cooperate more on climate finance issues and work to support “developing countries in their clean energy transitions.”
Despite their pledge of cooperation, bilateral relations remain a concern for many U.S. lawmakers.
New House of Representatives Speaker Kevin McCarthy of California has identified the Communist Party of China as one of two "long-term challenges" for the House, along with the national debt.
"There is bipartisan consensus that the era of trusting Communist China is over," McCarthy told the House last week when the chamber voted 365 to 65 — with 146 Democrats joining Republicans — to establish the House Select Committee on China.
Last year, the Department of Commerce added dozens of Chinese high-tech companies, including makers of aviation equipment, chemicals and computer chips, to an export controls blacklist, citing concerns over national security, U.S. interests and human rights. The move prompted the Chinese to file a lawsuit with the World Trade Organization.
Despite the conflicts, Yellen said she plans to visit China soon and would welcome Chinese officials to the U.S.
Both China and the U.S. are facing economic challenges.
China’s economic growth has slowed markedly in the face of its devastating coronavirus outbreak, while the U.S. is still grappling with the effects of its highest inflation rate in four decades although the increase in consumer prices has eased in recent months. In addition, the U.S. government is reaching its debt spending limit in the coming months, with great uncertainty in how Biden, a Democrat, will resolve the issue with the new Republican-controlled House.
The debt issue is of keen interest to Asia, as China is the second-largest holder of U.S. debt.
The Russian invasion of Ukraine has hindered global economic growth, pushing the U.S. and its allies to agree on an oil price cap on Russia in retaliation, putting China in a difficult spot as it is a friend and an economic ally of Russia.
High interest rates globally have increased pressure on debt-burdened nations that owe great sums to China.
Zambia is renegotiating its nearly $6 billion debt with China, its biggest creditor. During a closed-door meeting at a U.S.-Africa leaders summit in Washington in December, Yellen said she and Zambian President Hakainde Hichilema discussed "the need to address debt sustainability and the imperative to conclude a debt treatment for Zambia."
Liu laid out an optimistic vision for the world's second-largest economy in an address Tuesday at the World Economic Forum in Davos, Switzerland.
"If we work hard enough, we are confident that in 2023, China's growth will most likely return to its normal trend. The Chinese economy will see a significant improvement," he said. Last year, it grew just 3%, its second worst performance in nearly 50 years.
After her stop in Switzerland, Yellen travels to Zambia, Senegal and South Africa this week in what will be the first in a series of visits by Biden administration officials to sub-Saharan Africa during the year.
Some information for this report came from The Associated Press, Reuters.