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Meeting on the sidelines of the World Economic Forum agenda, the United States Secretary of the Treasury, Janet Yellen, and the Vice Premier of China, Liu He, met a few hours from the Davos Forum, in the Swiss city of Zurich, to meet common ground on issues of climate change and economics. Both sides vowed to “handle differences” to cooperate bilaterally.
It was the first face-to-face meeting between the two leaders. For two and a half hours they tried to unfreeze relations and clear the way for future diplomatic meetings. This was the highest-ranking contact between the two countries since their presidents agreed last November to explore areas of potential cooperation.
“No matter how circumstances change, we must always maintain dialogue and exchanges,” said the US Treasury Secretary, as the basic premise for the meeting of both parties on Wednesday, January 18.
“While we have areas of disagreement and will communicate them directly, we must not allow misunderstandings, particularly those resulting from a lack of communication, to unnecessarily worsen our bilateral economic and social relationship,” Yellen said during the meeting.
Today I met with Vice Premier Liu He of the People’s Republic of China, our first in-person meeting. We exchanged views on macroeconomic developments and global financial issues in our efforts to deepen communication between the US and China. pic.twitter.com/lafTqo7Unr
—Secretary Janet Yellen (@SecYellen) January 18, 2023
“Our countries have a responsibility to manage differences and prevent competition from becoming something close to conflict,” Janet Yellen, US Treasury Secretary.
Both came to the meeting with similar thoughts and in the words of the Chinese vice premier, China and the United States should “take into account the big picture, try to handle differences appropriately and seek common ground.”
However, while the meeting was taking place in Zurich, from Davos the UN Secretary General, Antonio Guterres, warned China and the United States that if they did not resolve their differences, they could cause a “great global fracture” that could cost the economy world 1.4 trillion dollars.
“We risk what I call the Great Rift. The decoupling of the world’s two largest economies. A tectonic rift that would create two different sets of business rules, two dominant currencies, two internet networks and two conflicting intelligence strategies.” This is the last thing we need,” Guterres said in his speech at the Davos Forum.
The two main economies live difficult times
Neither US President Joe Biden nor his Chinese counterpart Xi Jinping attended the World Economic Forum. Both countries face local challenges as they try to preserve and defend their position in the international economic sphere.
While China is experiencing a phase of reopening after three years of closures due to the Covid-19 pandemic, the United States is sparing no efforts to reduce inflation, which in June 2022 reached the highest figure in 40 years (9.1 % YoY).
Washington is also close to reaching its legal debt ceiling and is on the brink of a political showdown between Democrats and Republicans to remove the debt ceiling. Beijing has a special interest in this issue, as it is the second largest creditor of US debt.
On Tuesday, January 17, ahead of the meeting between Yellen and He, a US official confirmed that US Secretary of State Antony Blinken will visit Beijing in early February, which could mark him as the first official in his position to visit China since October 2018.
With Reuters and AP.
