China and U.S. Have ‘Candid’ Talks on Issues of Concern

(Bloomberg) -- The U.S. and Chinese governments made some incremental progress in their economic and trade negotiations, with Chinese Vice Premier Liu He and U.S. Treasury Secretary Janet Yellen holding their second call in about four months.

China described the conversation as “pragmatic, candid and constructive” in a statement Tuesday in Beijing, saying the two sides agreed that it’s important to strengthen communication and coordination of macroeconomic policies as the world’s recovery faces a critical moment. 

Overall U.S.-China relations have improved since a phone call between Presidents Joe Biden and Xi Jinping last month, after the U.S. administration became frustrated with Beijing’s move to link progress on climate talks with other issues. Shortly afterward, the U.S. reached a deal to release Huawei Technologies Co. Chief Financial Officer Meng Wanzhou from extradition proceedings in Canada -- one of Beijing’s top demands.

Since then, the world’s biggest economies have moved to rebuild communication lines cut off during years of clashes during the Trump administration over everything from trade and Taiwan to tech and the origins of the coronavirus. Xi and Biden are preparing to hold their first summit via video since the U.S. presidential election, though have yet to set a date.

The call was the second time that Liu and Yellen have spoken since Biden came into office, following a June discussion on how to “support a continued strong economic recovery and the importance of cooperating on areas that are in U.S. interests, while at the same time frankly tackling issues of concern,” according to a U.S. statement at the time. 

While the tone of Tuesday’s Chinese statement was more positive than in June, there has been little substantive progress over trade or economic issues. The Chinese side once again expressed its views on U.S. tariffs and sanctions and the treatment of Chinese companies, but there was no mention of Yellen’s response in either the Chinese or U.S. statements.

Read more: China’s Response to U.S. Trade Talks Shows Gap Between Two

China has repeatedly said the U.S. should remove the tariffs on Chinese exports imposed during the administration of former President Donald Trump, and has repeatedly denounced U.S. sanctions against companies like Huawei Technologies Co. 

Yellen “frankly raised issues of concern” with Liu, according to a U.S. statement after the call. The two sides agreed to continue talking, both statements said, without providing any further details. 

Read more: China Meets Only Half of U.S. Trade Deal Target as Talks Restart

Earlier this month U.S Trade Representative Katherine Tai said that she would push the Chinese to fulfill their commitments in the 2020 trade deal. Later she directly told Liu about U.S. concerns “relating to China’s state-led, non-market policies and practices that harm American workers, farmers and businesses.”

According to state-media connected blog Taoran Notes, a careful comparison of statements from calls this month and in May show that relations are stable and improving. 

In the readout from the calls between Liu, Tai and Yellen this month, the Chinese statements said the talks were “pragmatic, candid and constructive.” However, in the readout in May of a call between Liu and Tai, the description was “candid, pragmatic and constructive.”

This tiny change is a sign that communication between the two sides “has improved in deeper and more specific areas and became more extensive,” according to the blog, which has frequently commented on the trade talks over the past three years. 

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With assistance from Bloomberg