TAIPEI, TAIWAN —

The United States and China have agreed to hold talks and form two economic groups to focus on a wide range of issues, including addressing U.S. complaints about China’s economic model, domestic and global economic growth and anti-money laundering efforts, according to a statement released on Saturday. By the U.S. Department of the Treasury.

The agreement came a day after U.S. Treasury Secretary Janet Yellen made an official visit to China, during which she urged Chinese leaders to change domestic manufacturing policies.

The two sides will have “in-depth exchanges” on promoting more balanced economic growth and combating money laundering.

Yellen said the efforts would create a structure for Beijing and Washington to exchange views and address China’s industrial overcapacity problem, which is the country’s ability to supply more products than is needed.

“I think the Chinese realize how concerned we are about the impact of their industrial strategy on the United States, that their exports could flood our market and make it difficult for American companies to compete,” she told reporters after the announcement on Saturday. .

Yellen was en route to Beijing after beginning a five-day visit to the southern city of Guangzhou, China’s important manufacturing and export hub.

While there won’t be an immediate solution to China’s industrial overcapacity problem, Yellen said Chinese officials understood it was an “important issue” for Americans, adding that her exchange with China’s Vice Premier He Lifeng would facilitate discussions around macro issues. Discussion of economic imbalances and their relationship to overcapacity.

China’s state-run Xinhua News Agency reported that Chinese officials issued a “comprehensive response” to the issue of industrial overcapacity raised by the United States. “Both parties agreed to continue communication,” an official source said.

The day before, Yellen urged Beijing to reform its trade practices and establish a “healthy economic relationship” with the United States. Earlier, Chinese state media warned that Washington may consider launching more protectionist policies to protect American companies.

Some analysts said the announcement reflected Yellen’s efforts to promote areas of U.S.-China cooperation agreed between U.S. President Joe Biden and Chinese leader Xi Jinping during a summit in San Francisco last November.

Dexter Roberts, director of China affairs at the University of Montana’s Mansfield Center, told VOA by phone: “When Xi Jinping met with Biden last November, they agreed to establish a working group, so Yellen will continue to push through this meeting. This process.”

While Roberts called the announcement a positive development, he said he did not think Beijing and Washington would reach an agreement on contentious trade issues during Yellen’s trip.

“There may be a temporary situation, such as China slightly relaxing subsidies for electric vehicles, but it is unclear how both sides will change the status quo to ease trade tensions,” he said.

Beijing’s dissatisfaction

While Washington highlighted the threat posed by China’s industrial overcapacity, Beijing focused on U.S. export controls on Chinese companies during Yellen and He Jiankui’s meeting.

A Chinese statement published by Xinhua News Agency said, “China expresses serious concern about Washington’s restrictive economic and trade measures against China.”

Some experts say the United States and China may make progress on U.S. export restrictions on Chinese companies.

“Some U.S. companies are calling on the government to lift some export restrictions, especially on chips. [integrated circuits]” Victor Shih, director of the 21st Century China Center at the University of California, San Diego, told VOA by phone.

Because China already produces or will soon produce some of the computer chips on the sanctions list, Shi said he believed restricting U.S. companies from selling some chips to China would only harm U.S. interests. “It really doesn’t hurt China that much,” he said.

In addition to U.S. export controls on Chinese entities, another important topic that Chinese officials are likely to raise in their meeting with Yellen is potential tariffs that Washington could impose on Chinese products, Shi said.

“Since China is the world’s largest exporter, it is not in China’s interest to impose significant tariffs around the world, especially on major importing countries such as the United States,” he said, adding that talks with Washington about lowering tariffs rather than enacting new regulations will become an important agenda item for Beijing.

While she did not explicitly commit to new sanctions on Chinese products, Yellen said she would not rule out the possibility of additional steps to protect U.S. electric vehicle, battery or solar panel supply chains from heavily subsidized Chinese green energy. product impact.

Xi Jinping warned in a phone call with Biden on Tuesday that China would not stand idly by if the United States “determines to curb China’s high-tech development and deprive China of its legitimate development rights.”

bilateral communication

Despite ongoing differences over contentious trade issues, both Yellen and He emphasized the importance of China and the United States “appropriately responding to each other’s key concerns” to build a more cooperative economic relationship.

Yellen said: “For the two largest economies, progress on global challenges such as climate change and debt distress in emerging markets in developing countries and concerns over overcapacity and economic actions related to national security are Close communication on issues remains critical,” Friday said.

Based on comments from Yellen and He Jiankui on Tuesday and signals sent by Biden in his call with Xi Jinping, some analysts said the United States and China will continue to put a cordon on their relationship to prevent it from deteriorating further.

“Both sides have realized that they are going to have to live together, and it may be uncomfortable at times,” said Zhiqun Zhu, an expert on Chinese foreign policy at Bucknell University.

Zhu Rongji said that while Sino-US relations will remain highly competitive, he believes Beijing and Washington will “maintain contact and seek cooperation in areas of mutual interest.”

“Maintaining stability is Xi Jinping and Biden’s top priority now,” he said.

Yellen is scheduled to hold meetings with other senior officials in Beijing on Sunday and Monday.