WASHINGTON, Feb 6 — The Biden administration has sent five senior United States (US) Treasury officials to Beijing this week for economic talks which will include China's "non-market" policies that are adding excess industrial capacity, a Treasury official said yesterday.
The delegation, led by Treasury Undersecretary for International Affairs Jay Shambaugh, planned to hold frank conversations yesterday and today as part of the US-China Economic Working Group about Beijing subsidies, which the US says encourage overproduction of goods, potentially flooding global markets.
Affected industries include electric vehicles, a sector whose development in the US the Biden administration is trying to boost with its own tax subsidies.
The group will discuss the US and Chinese economic outlooks, investment screening regimes for national security in both countries and opportunities to cooperate on climate change and debt relief to poor countries.
The emphasis on China's industrial subsidies comes as the Biden administration is continuing a review of US tariffs imposed on hundreds of billions of dollars worth of Chinese imports by former president Donald Trump.
US Treasury Secretary Janet Yellen and other senior administration officials have called for the punitive duties of up to 25 per cent to be shifted to a more strategic focus.
Trump, the expected Republican presidential nominee, has signalled he would double down on stronger tariffs if elected, calling for China's most-favoured-nation trading status to be revoked, a move which would effectively raise nearly all tariffs on Chinese goods. Biden is expected to take a tough but more nuanced approach to China.
The meeting is the third since Yellen and her Chinese counterpart, Vice Premier He Lifeng, launched the group in September last year alongside the parallel Financial Working Group.
That group met in Beijing in late January, with Treasury officials receiving assurances that Chinese banks were "doing well" despite China's real estate and financial market turmoil.
The meetings are the first for the economic group in Beijing. The group last met in San Francisco ahead of November's Asia Pacific Economic Cooperation Summit after an initial virtual meeting.
— Reuters
