The United States Treasury Secretary, Janet Yellen, said on Monday that the directional talks between the United States (US) and China will focus on Beijing's need to change its industrial and economic policies.
Yellen said in her conversations with Chinese officials that the visit was to discuss Beijing's plans for their economy. Yellen also declined to share details of what the US might use to prevent China's industrial policy from causing American job losses.
The advantage of China's industry with the production of goods that are cheap in terms of prices is increasingly becoming a point of international concern.
China's concerns over oversupply tend to focus on aspects of deflation, the impact on the health of the banking sector, and fiscal pressure on local governments, said Yue Su, lead economist for China at The Economist Intelligence Unit.
Pushing to increase domestic demand, Yellen explained how China can increase domestic demand compared to supply by supporting retirement or children's education. The high cost of living, including housing and health care, has prompted many Chinese to save money rather than spend.
Yellen acknowledged that efforts to reduce industrial potential or increase domestic demand cannot be resolved quickly.
Both Washington and Beijing are increasingly citing national security as a reason for new measures. Yellen on Monday said the two sides are exchanging information about the use of economic tools in national security.
In a statement from China, Li said Beijing hoped the US would adhere to the norms of the market economy and avoid politicizing trade issues. He said the development of China's new energy industry will make an important contribution to efforts towards the global carbon issue.
The US and China agreed to "intensive exchanges on balanced growth in the domestic and global economy," according to a statement from the Ministry of Finance after Yellen's meeting with Vice Premier He.
The two countries also agreed to "initiate Treasury-PBOC Financial Cooperation and Exchange in Anti-Money Laundering to expand cooperation against illegal finance and financial crime," the statement said.
The Chinese side did not directly mention such an agreement, but said the two sides plan to maintain communication. Beijing also "expressed serious concern" about US trade sanctions.
A Chinese statement described the talks as "bridge-building," and noted discussions on "balanced economic growth," "financial stability," and "prevention of money laundering."
