China-US Graphic: GT

Chinese and US economic officials will hold another round of talks under the Financial Working Group mechanism later this week in Shanghai, according to several US media reports, indicating that the world's two biggest economies are continuing their dialogue amid mounting bilateral trade tensions and growing risks for the global economy.

The talks, which reportedly will take place on Thursday and Friday, come after the third plenary session of the 20th Central Committee of the Communist Party of China (CPC) drew up sweeping reforms that are set to underpin China's high-quality development for years to come, and as global markets are increasingly worried about the prospects of the US economy, which some fear could fall into a potential recession. 

Amid its economic woes, Washington needs coordination with China to respond to potential risks and challenges and ensure overall economic and financial stability, analysts said. And enhanced dialogue and cooperation between Chinese and US officials will help inject a sense of stability into an increasingly uncertain global geo-economic situation, the analysts said, urging the US to stop politicizing trade issues and remove restrictions and tariffs against Chinese products. 

Timely talks

The US delegation led by Brent Neiman, the Treasury Department's assistant secretary for international finance, departed the US on Monday and the talks will take place on Thursday and Friday, The New York Times reported on Monday. The US delegation is expected to meet with senior officials from the People's Bank of China, the central bank and other departments, according to the report. 

Chinese officials have not yet publicly confirmed the talks as of press time on Tuesday. This would be the fifth meeting of the Financial Working Group, which was established in 2023 as part of efforts by the two countries to strengthen communication on economic and financial issues. The fourth meeting was held in April in Washington, where the two sides held discussions on a wide range of issues, including monetary policies, financial stability and cooperation on financial regulation. 

While the upcoming talks will likely continue to focus on similar issues, there are new pressing issues that will be discussed, including growing concerns over the US economy that has rattled global markets, analysts said.

"The US pays attention to Chinese policies and seeks dialogue with China largely because of its own interests, especially as the US faces economic pressure," Xin Qiang, deputy director of the Center for American Studies and director of the Center for Taiwan Studies at Fudan University, told the Global Times on Tuesday. "US inflation has not fallen back to an ideal range and new jobs data was disappointing, which lays bare the underlying economic problems. Some analysis even suggests that the US economy may face a potential recession." 

Highlighting their keenness to enhance communication with China amid growing risks facing the US economy, US officials have also revealed their intentions for the upcoming talks.

"We intend for this FWG meeting to include conversations on financial stability, issues related to cross-border data, lending and payments, private-sector efforts to advance transition finance, and concrete steps we can take to improve communication in the event of financial stress," Neiman said ahead of the trip, referring to the abbreviation for the financial working group, according to The New York Times. 

This shows that the US side wants to coordinate with China in terms of macro policies and responses to potential economic troubles, analysts said. 

"In view of the current poor expectations for economic growth and the need to avoid global shocks caused by major monetary policy adjustments, the topics of the talks are timely and urgent," Zhang Monan, deputy director of Institute of American and European studies at the China Center for International Economic Exchanges in Beijing, told the Global Times on Tuesday. 

Zhang said that coordination and cooperation between China and the US over policies are conducive to stabilizing global financial markets and also beneficial to both sides. "As China and the US are major economic powers, coordination of their monetary and financial policies is of great significance to stabilizing the global financial market," he said. 

China's growing role

While the US continues its attempt to contain China's development, it also increasingly realizes the irreplaceable role of China in helping deal with both global as well as the US' economic issues, especially as China continues to promote high-quality development and high-level opening-up, analysts said. 

Indeed, one of the main topics of the upcoming talks in Shanghai may focus on the reform measures outlined at the third plenary session of the 20th CPC Central Committee, they said. 

"The third plenum serves as an important wind vane for China's future reform and has attracted the attention of the world. As the world's second-largest economy, China will release growth momentum through a new round of reform and opening-up in the future, which will have a huge impact on the world economy," Zhang said, noting that the US also pays great attention to Chinese policies in areas such as the financial industry and market access. 

In contrast to some inward and protectionist trends in some countries and regions, including the US, China continues to strive for high-quality development and high-level opening-up. "Opening-up is a defining feature of Chinese modernization. We must remain committed to the basic state policy of opening to the outside world and continue to promote reform through opening-up," the communique of the latest third plenary session stated. 

Analysts said that as the communique clearly stated, China will continue to promote high-quality, sustainable development and will expand high-level opening-up, which will create more opportunities for the world, and relevant countries should stop smearing Chinese policies and stop politicizing economic and trade issues. 

Even as they pursue talks with Chinese counterparts, US officials have continued their crackdown campaign against Chinese products and businesses. For example, after the fourth round of talks of the Financial Working Group, the US in May announced additional tariffs on a wide range of Chinese products, including electric vehicles. The US has since delayed the imposition of the additional tariffs on some products.  

At the upcoming talks, Chinese officials are expected to raise concerns over the US' economic and trade restrictions, according to analysts. 

"The US has apparently realized that imposing additional tariffs on Chinese products will only increase the costs for US consumers and exacerbate the US inflation," Xin said, adding that despite such a realization, US politicians, out of political considerations, choose to defy basic economic laws. 

He Weiwen, a senior fellow at the Center for China and Globalization, said that the US may, under domestic economic pressure, pursue talks with China, but it is unlikely to stop its long-term containment of China. "We must have a clear understanding of this, while seeking to stabilize and improve China-US bilateral ties," He told the Global Times on Tuesday.