US, China Agree to Launch Talks on “Balanced” Growth

US Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng agreed to launch formal talks aimed at addressing China's growing surplus industrial capacity.

This came after two days of meetings in the southern Chinese city of Guangzhou.

The two sides put forward the initiative as a way to hold intensive talks on balanced growth in the domestic and global economies.

“The Chinese understand how concerned we are about the implications of their industrial strategy for the United States, in terms of potentially flooding our markets with exports,” Yellen told reporters after concluding two days of talks with He.

During the talks, China expressed "grave concerns" about US economic and trade restrictions, according to a report from Chinese news agency Xinhua.

Since arriving in Guangzhou on Thursday evening, Yellen has directed most of her criticism at the way Chinese officials have managed their economy. Beijing has been repeatedly accused of mistreating U.S. companies and other foreign companies operating in China, and causing turmoil in global markets by supporting surplus production in certain sectors.

“This is a complex issue related to their entire macroeconomic and industrial strategy, so it's not going to be resolved in an afternoon or in a month,” she said. “This provides a structured way in which we can continue to listen to each other and see if we can find a way forward to avoid conflict.”

Yellen also said that in her conversations with He, she addressed U.S. concerns that Chinese exports help sustain Russia's military industries and thus aid Moscow in its efforts to defeat Ukraine.

She added: “We have been clear with China that we see Russia gaining support from the goods that Chinese companies supply to Russia.”

The two sides also agreed to launch a joint initiative between the Ministry of the Treasury and the People's Bank of China aimed at combating money laundering and illicit financing.

“The new initiative will enable the United States and China to share best practices, and provide updates on actions each of us is taking to close gaps in our financial systems,” Yellen explained in the statement.