China US Photo:VCG

China and the US have agreed to set up two working groups for economic and financial matters in a major step that experts say could help put the brakes on a downward spiral in bilateral ties following a slew of recent high-level exchanges between officials.

The move, which calls for meetings to discuss economic and financial issues, sends a rare and important signal to the world that its two biggest economies are jointly working to manage differences and address disputes through consultations, after an extended period of relation deterioration due to the US' relentless crackdowns on Chinese high-tech industries and companies, which also drew firm responses from China, experts noted.

Underscoring the significance of the move, the working groups, agreed on by Chinese Vice Premier He Lifeng and US Treasury Secretary Janet Yellen, will be headed by vice-ministerial level officials and will hold meetings both regularly and irregularly to strengthen exchanges on economic and financial matters.

According to a statement by the People's Bank of China (PBC), the country's central bank, on Friday, the economic working group is led by vice-ministerial officials from the Ministry of Finance of China and the US Treasury Department, while the financial working group is led by vice-ministerial officials from the PBC and the US Treasury Department.

The US Treasury Department said on its official website on Friday that the two working groups will provide ongoing structured channels for frank and substantive discussions on economic and financial policy matters, as well as an exchange of information on macroeconomic and financial developments. 

The formation of these working groups builds on the consensus reached between Yellen and He during her trip to Beijing in July this year, and is aimed at implementing the important consensus reached by the two heads of state in Bali, Indonesia, according to the US Treasury Department.

"These working groups will serve as important forums to communicate America's interests and concerns, promote a healthy economic competition between our two countries with a level playing field for American workers and businesses, and advance cooperation on global challenges," Yellen said on her X account on Friday.

Since 2018, the economic and trade contacts between China and the US have been mainly based on negotiations, and the high-level dialogue and communication mechanism was basically suspended. Therefore, the establishment of two high-level working groups by the two countries is of great significance and value, Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Friday.

He Weiwen, senior fellow of the Center for China and Globalization, told the Global Times on Friday that the working groups eye on achieving practical results following multiple previous China-US dialogues, and building consensus for global economy recovery, noting that China welcomes any types of bilateral communication channel. 

Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times that the establishment of the working groups demonstrated that the efforts in China-US cooperation are transforming from lip service to practical moves.

"Generally, setting up the working groups generates a mechanistic measure to secure the stability of China-US relations, and will further avoid discord and impact on the global market caused by misunderstanding in terms of macroeconomic and financial policies," He noted.

Under the new China-US communication mechanism, China may focus on US-launched trade barriers, extra tariffs, export controls and investment restrictions, and the US may focus on issues of market rules and national security, Zhou said.

Zhou noted that the Biden administration's basic position on China will not change, but this kind of communication mechanism may at least enhance mutual understanding, reduce miscalculations and further bring economic and trade relations between the two countries back on track. "But what results can be achieved and what role can be played by China and the US under the new communication mechanism need to be further observed," he added.

The announcement follows a string of visits by US high-ranking administration officials to China this year. 

During US Commerce Secretary Gina Raimondo's visit in China in August, China and the US agreed to establish a multi-level communication mechanism to strengthen talks on economic and trade affairs, and Chinese Commerce Minister Wang Wentao and Raimondo agreed to maintain regular communication, discuss important issues directly and in a timely manner, and meet at least once a year, according to the Chinese commerce ministry.

"The US has been committed to communicating with China on economic and trade issues, and senior officials from the Biden administration including Yellen and Raimondo have also visited China, which at least responds to the wishes of the US business community for the US and Chinese economies to be highly complementary, and they hope to improve economic and trade relations with China," Zhou said.