BEIJING: The reported meeting of China-US Financial Working Group, which was widely expected to focus on topics such as macroeconomic and financial stability, governance of the IMF and capital markets issues, signaled that despite the trade tensions, both sides are still seeking to stabilize relations between the world’s two largest economies.
The reported meeting demonstrated China and the US’ willingness and practical need to deepen cooperation in the financial sector, which is expected to enhance understanding and trust in bilateral relations. Also, given the relatively weak global economic growth, weaker-than-expected August jobs report in the US and fears of a hard landing for the US economy which unsettled the global market, the reported meeting is seen as a positive step toward promoting global financial stability, experts said.
However, the reported meeting took place as the US continues to escalate its crackdown on various Chinese industries, including electric vehicles (EVs) and semiconductors, which could hinder economic and trade cooperation. Experts urged the US to take concrete actions to ensure smooth communication and cooperation in the economic and trade fields.
Neither China nor the US has publicly released information on the meeting of the bilateral Financial Working Group as of press time, which would be the fifth meeting of the mechanism established in 2023 as part of efforts by the two countries to strengthen communication on economic and financial issues.
The fact that both countries are implementing the communication and exchange mechanisms is a positive signal. It shows that the two countries can still resolve some of their differences through cooperation and communication, expanding their common interests and minimizing disagreements.
The reported agenda of the meeting demonstrated that both China and the US are willing to enhance communication and coordination in the financial sector.
The US’ weaker-than-expected unemployment rate also sounds warning of an economic recession, further underscoring the urgency of Washington to cooperate with Beijing in terms of economic and financial policies.
In this context, cooperation between China and the US in financial stability is crucial for mitigating the risks of instability from the US and the spillover impact on global market, they said.
The US unemployment rate jumped to near a three-year high of 4.3 percent in July amid a significant slowdown in hiring, heightening fears the labor market was deteriorating and potentially making the economy vulnerable to a recession, Reuters reported.
In contrast, the Chinese economy has demonstrated resilience with stronger growth momentum in July, navigating through downside risks as more pro-growth policies have kicked in. The output of industrial enterprises above the designated size went up by 5.1 percent year-on-year, while retail sales rose by 2.7 percent, official data showed Thursday.
A broad range of key indicators maintained steady expansion, with production and demand on the rise, overall employment remaining stable, and new growth drivers building up, according to the National Bureau of Statistics.
In May this year, the Biden administration announced that it was imposing additional tariffs on a range of Chinese imports, including EVs. In June, the US Treasury Department issued draft rules to restrict certain US investments in semiconductor, AI and other high technology sectors in China.
Experts believed that the US should work with China to seek potential areas of cooperation while handling differences properly to ensure a solid foundation for mutually beneficial economic and trade relations.
