Chinese Vice Premier Liu He and US Treasury Secretary Janet Yellen pledged to hold “frank” talks in their first in-person meeting in Zurich on Wednesday.
Both leaders said they would manage their differences and find ways to work together on global challenges, as the world’s biggest economies work to repair frayed relations.
Yellen said there was a “pressing need” for the United States and China to communicate on macroeconomic and financial conditions. Both countries needed to “prevent competition from becoming anything ever near conflict,” she added.
“While we have areas of disagreement, and we will convey them directly, we should not allow misunderstandings, particularly those stemming from a lack of communication, to unnecessarily worsen our bilateral economic and financial relationship,” Yellen said at the start of a meeting scheduled to last over two hours.
Liu said both countries need “serious communication” and coordination on issues including climate change and the economy. China was ready for an in-depth exchange, he added
“We do believe that we have to always bear in mind the bigger picture, try to manage our differences appropriately and seek common ground,” Liu said, speaking through an interpreter. “In this way, hopefully we can work together to maintain the overall stability of Chinese-US relations.”
Treasury officials said the discussion between Yellen and He would centre on the global economy, sovereign debt issues and climate change. A Chinese official said they would also touch on the possibility of a world recession.
Warning against global economic decoupling
The talks follow the meeting between US President Joe Biden and Chinese President Xi Jinping in Indonesia in November, where they pledged to increase communication between the two countries.
Liu, a confidante of Xi, on Tuesday urged global leaders gathered in Davos for the World Economic Forum to abandon what he called a “Cold War mentality” and expand international cooperation.
The IMF has warned against decoupling the global economy into two competing blocs. It could reduce global economic output by up to 7% – and even more in vulnerable countries, the IMF said.
Yellen’s meeting with Liu comes before a three-country visit to Africa. She will push to expand US trade and business ties with the continent, which China has long dominated.
The former Federal Reserve chair is also expected to repeat her criticism of China’s “non-market” economic practices and the use of forced labor in the Xinjiang region.
She is also likely to raise the issue of Beijing not moving more quickly to provide debt relief, with China being the world’s largest creditor.
Yellen has met virtually with Liu three times since taking office. She also met Chinese central bank governor Yi Gang in Bali, Indonesia.
In December, Yellen told reporters she was also open to visiting China and looked forward to more “intense interactions” with Chinese officials.
- Reuters, with additional editing by Vishakha Saxena