US, China hold rare discussion on ‘severe’ economic challenges, supply chains

BEIJING: Top officials from the United States and China held a “candid” video call on Tuesday to discuss global economic challenges, especially regarding supply chains.

The exchange between Chinese Vice Premier Liu He and US Treasury Secretary Janet Yellen came as President Joe Biden considers lifting some tariffs on imports from China to try and ease soaring inflation.

The world’s two biggest economies are also grappling with Covid-snarled supply chains and rising global energy prices.

“The two sides agree that as the world economy is facing severe challenges, it is of great significance to strengthen macro-policy communication and coordination between China and the United States,” China’s official Xinhua news agency reported.

Blinken set to meet Wang on sidelines of Bali conference

“And jointly maintaining the stability of the global industrial and supply chains is in the interests of both countries and the whole world.”

The Xinhua report said the video call took place at the request of the United States, and described the conversation as “constructive”.

Yellen and Liu “discussed macroeconomic and financial developments in the United States and China, the global economic outlook amid rising commodity prices and food security challenges”, the US Treasury Department said in a readout.

“Secretary Yellen frankly raised issues of concern including the impact of the Russia’s war against Ukraine on the global economy and ‘unfair, non-market’ (Chinese) economic practices.”

China has repeatedly refused to condemn the Russian invasion, and has been accused of providing diplomatic cover for Moscow by blasting Western sanctions and arms sales to Ukraine.

With inflation in the United States at 40-year highs, authorities there are rushing to try and find ways to ease price pressures.

Among the options is lifting some of the trade tariffs imposed on China by Biden’s predecessor Donald Trump.

Any decision is likely to come soon as some of the Trump duties are set to expire from July 6 unless renewed.

The penalties were aimed at punishing what the United States says are China’s ‘unfair trade practices’.

In the call with Yellen on Tuesday, China “expressed its concern about issues including the lifting of additional tariffs on China and sanctions by the US side”, according to Xinhua.

Blinken-Wang meeting

US Secretary of State Antony Blinken will hold a rare meeting with Chinese Foreign Minister Wang Yi on the sidelines of a regional conference in Bali this week, the State Department in Washington said on Tuesday.

Wang and Blinken, who last met in October, will meet on the sidelines of a Group of 20 ministerial meeting on the Indonesian resort island, the State Department said, amid high tensions on a range of issues including Taiwan.

The meeting comes as US President Joe Biden voices hope for a new conversation in the coming weeks with Chinese President Xi Jinping, who has not traveled internationally since the Covid-19 pandemic.

The State Department said that Blinken would also hold talks with his Indonesian counterpart, among others, and then travel on Saturday to US ally Thailand for a visit that was canceled last year after an outbreak of Covid in the top US diplomat’s delegation.

Meetings between the United States and China, once routine, had nearly ended during the pandemic and as tensions soared between the world’s two largest economies.

Blinken and Biden’s national security adviser, Jake Sullivan, met in March 2021 in Alaska with their counterparts in a meeting that turned confrontational, with the Chinese officials publicly upbraiding the United States.

But since last month, talks have appeared to become more commonplace, with Sullivan meeting senior Chinese foreign policy official Yang Jiechi in Luxembourg last month and the two nations’ defence chiefs speaking on the sidelines of a conference in Singapore.

Biden spoke by telephone with Xi in March for talks that focused heavily on Ukraine, with the United States condemning Beijing’s support for Russia but seeing little sign of material support for the invasion.

Blinken’s last talks with Wang took place in October in Rome.

The meetings come amid growing US concern about Taiwan, which Biden has vowed to defend if China invades the self-governing democracy that it views as its territory.

Published in Dawn, July 6th, 2022