US, China agree to hold talks on 'balanced economic growth'

The United States and China have agreed to hold "intensive exchanges on balanced growth", the US Treasury Department said in a statement, after two days of talks between Treasury Secretary Janet Yellen and her Chinese counterpart He Lifeng in Guangzhou.

The planned talks mark the latest step forward in joint efforts to stabilise rocky ties between the world's two leading economies since a meeting between presidents Joe Biden and Xi Jinping last November.

"These exchanges will facilitate a discussion around macroeconomic imbalances, including their connection to overcapacity, and I intend to use this opportunity to advocate for a level playing field for American workers and firms," said Yellen in a separate statement on Saturday (Apr 6).

Overcapacity is seen by the United States as huge Chinese subsidies - to industries such as solar, electric vehicles and batteries - risking a surplus of cheap goods that threatens those sectors elsewhere.

After warning Friday that China's overcapacity could pose risks to economies around the world, Yellen told the media that she discussed the issue for "more than two hours" during Saturday morning talks with He.

Beijing has dismissed concerns over its vast state support for industry, last month condemning an EU probe into its subsidies for EVs as "protectionism" and part of a Western effort to politicise international trade.

China's Vice Premier He Lifeng (right) and US Treasury Secretary Janet Yellen shake hands before a meeting at the Guangdong Zhudao Guest House in the southern Chinese city of Guangzhou, on Apr 6, 2024. (Photo: AFP/Pedro Pardo)

But Yellen suggested Saturday that some progress had been made in getting the two sides to see eye-to-eye.

"I think the Chinese realise how concerned we are about the implications of their industrial strategy for the United States, for the potential to flood our markets with exports that make it difficult for American firms to compete, and that other countries have the same concern," said Yellen.

"It's not going to be solved in an afternoon or a month," she said, hailing the agreement for fresh talks for "(providing) a structured way in which we can continue to listen to one another and see if we can find a way forward that will avoid conflict".

Yellen now heads north to Beijing, where she will have a two-day visit involving more high-level discussions with Chinese leaders.

This visit to China - her second in the past year - comes as Washington and Beijing feud over everything from access to advanced technology, the self-ruled island of Taiwan and video app TikTok.

(CNA)