On the morning of October 26, Liu He, member of the Political Bureau of the CPC Central Committee, vice premier of the State Council and leader of the Chinese side of the China-US Comprehensive Economic Dialogue, held a video call with US Treasury Secretary Yellen at the invitation.
According to Chinese media reports, the two sides had pragmatic, frank and constructive exchanges on the macroeconomic situation and cooperation in multilateral and bilateral fields. The two sides believe that the world economic recovery is at a critical moment, and it is very important for China and the United States to strengthen macroeconomic policy communication and coordination.
The Chinese side expressed its concern about the removal of tariffs and sanctions imposed by the United States and the fair treatment of Chinese enterprises. The parties agreed to continue to maintain communication.
According to U.S. media reports, the U.S. Treasury Department said in a statement that U.S. Treasury Secretary Janet Yellen "frankly raised concerns" during a virtual meeting with Chinese Vice Premier Liu He on Monday. The Treasury statement did not elaborate on those concerns. The statement said the two officials "discussed macroeconomic and financial developments in the United States and China, recognizing that the development of our two economies has a significant impact on the global economy." “
How to interpret this conversation? In particular, how to understand this sentence: "The world economic recovery is at a critical moment, and it is very important for China and the United States to strengthen macroeconomic policy communication and coordination"?
<h1 class="pgc-h-arrow-right" data-track="7" > unstable prospects for global economic recovery require U.S.-China cooperation</h1>
At present, the world economic recovery is at a critical juncture, and the epidemic has been controlled in some regions, but there are repeated situations. Repeated outbreaks have combined with other factors to lead to crises in global supply chains and inflation, which is prevalent in various countries. The pace of global economic recovery is slowing down, and the risk of the global economy entering a "recession" or even "stagnation" is increasing. If the relations between the major powers are not well coordinated, the momentum of the world economic recovery will be greatly affected.
As the two largest open economies, China and the United States have a very large impact on the global economy. China and the United States are both the largest economies and the largest markets, occupying a very important position in international trade and investment. More importantly, the macroeconomic policies of the two countries have a great impact on global financial stability.
<h1 class="pgc-h-arrow-right" data-track="32" > the "big release" of the US currency and trade and investment restrictions with China are the main problems at present</h1>
The main problem at present is that the United States over-issues currency in order to stimulate the economy. Since last year's pandemic, the total amount of money issued by the United States has reached $5.8 trillion, equivalent to Japan's gross domestic product and 1.5 times the United Kingdom's gross domestic product. Many of the current issues in the global economy, such as rising energy and raw material prices, have a lot to do with U.S. monetary policy, because almost all of these commodities are traded internationally in dollars. Inflation in the United States has now reached a relatively high point, which is also caused by the US monetary policy.
The United States also maintains additional tariffs on Chinese exports to the United States, and there are still a lot of restrictions on Chinese corporate investment. There are still many restrictions on Chinese high-tech companies' access to U.S. products. These measures harm others and harm themselves. The additional tariffs imposed on China are largely borne by U.S. businesses and consumers, which have lost more than $100 billion in economic costs and more than 200,000 jobs in the trade war. At a critical juncture when the global economic recovery is at stake, removing trade barriers between China and the United States is good for both sides and good for the recovery of the global economy.
<h1 class="pgc-h-arrow-right" data-track="33" > debt issues may be an important part of the talks between the two sides</h1>
Neither side's reports specifically address macroeconomic issues of mutual concern.
However, according to previous reports, some people in the United States are concerned about the debt problems of real estate companies such as Evergrande. They fear that if the debts of these companies are not properly resolved, they may have a big impact on the US market. This is because the two sides are closely linked to each other through the bond market and through corporate financing, so it is very important to maintain the financial stability of China and the United States.
Judging from the current situation of the two sides of the phone call, the two sides affirmed this meeting, believing that it is a crucial period for KK, a key dialogue, and that it is very important to strengthen consultations.
We have also seen that the current Sino-US relations are developing in the direction of easing, especially in the economic and trade fields, communication and dialogue in the economic and trade fields, especially the increased tariffs brought about by the trade war, and the restrictions on Chinese enterprises, which can be said to be conducive to the recovery of the global economy and important to the improvement of Sino-US relations.
In addition, China and the United States should strengthen coordination and cooperate in solving the problem of the global epidemic, and only when more countries control the epidemic and increase the vaccination rate can the world economy get back on track faster.
Judging from the content of the report, the Sino-US economic dialogue has still not fully returned to the track of institutionalization.
One reason is that the Biden administration faces very strong opposition at home, mainly republican pressure on Biden's administration. They advocate a harsher stance on China, do not want to see a détente in Sino-US relations, and challenge China's interests on many issues, including Taiwan. We need to recognize the constraints placed on the Biden administration by U.S. domestic pressures. Some of the things that the Biden administration has said publicly may be mainly for the United States to hear, and we do not need to be more truthful in every sentence, and every sentence is to give him back. The key is to look at how the Biden administration specifically does, to "listen to its words and watch its deeds." We must maintain a clear understanding of the domestic politics of the United States.