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Top U.S. Treasury Officials to Visit Beijing for Economic Talks
A meeting of the new economic working group comes as the U.S. and China are trying to prevent any escalation of hostilities.
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The visit could pave the way for a second trip to China by Treasury Secretary Janet L. Yellen. She traveled to Beijing last summer. Credit...Loren Elliott/Agence France-Presse — Getty Images
By Alan Rappeport
Reporting from Washington
Feb. 5, 2024Updated 2:10 p.m. ET
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The Biden administration is dispatching a high-level delegation of Treasury Department officials to Beijing this week for a round of economic talks as the world’s largest economies look to continue engagement efforts that President Biden and his Chinese counterpart, Xi Jinping, agreed to pursue last year.
A Treasury official, speaking on the condition of anonymity because the trip has not been publicly announced, said that the two days of meetings would include “frank conversations” about China’s use of nonmarket economic practices like government subsidies. The U.S. officials also plan to discuss concerns about industrial overcapacity, which could flood international markets with cheap products.
They will also talk about ways to resolve sovereign debt burdens that have been weighing on low-income countries and preventing some of those countries from investing in sustainable development and climate initiatives. China is one of the world’s largest creditors and has faced international pressure to make concessions that would unlock a global effort to restructure hundreds of billions of dollars of debt owed by poor countries.
More broadly, the two governments will discuss the macroeconomic outlooks for their countries, whose economies are critical to the health of the overall global economy. The United States is proving to be the most resilient economy in the world. China, meanwhile, continues to be haunted by a financial industry that’s struggling to contain enormous amounts of local government debt, a volatile stock market and a crisis in its real estate sector.
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Last week, the International Monetary Fund, in its latest economic outlook, projected that China’s economy would grow at a rate of 4.6 percent in 2024, a faster pace than previous projections. But it also urged China to make longer-term structural changes to its economy, such as overhauling its pension program and reforming its state-owned enterprises, to prevent its output from slowing more dramatically.
Inflation F.A.Q.
Card 1 of 5
What is inflation? Inflation is a general increase in prices, which will cause a loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.
What causes inflation? It can be the result of rising consumer demand. But inflation can also rise and fall based on developments that have little to do with economic conditions, such as limited oil production and supply chain problems.
Is inflation bad? It depends on the circumstances. Fast price increases spell trouble, but moderate price gains can lead to higher wages and job growth.
How does inflation affect the poor? Inflation can be especially hard to shoulder for poor households because they spend a bigger chunk of their budgets on necessities like food, housing and gas.
Can inflation affect the stock market? Rapid inflation typically spells trouble for stocks. Financial assets in general have historically fared badly during inflation booms, while tangible assets like houses have held their value better.
“Without those reforms, there is risk that Chinese growth would fall below 4 percent,” Kristalina Georgieva, the I.M.F.’s managing director, told reporters on Thursday.
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Alan Rappeport is an economic policy reporter, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters. More about Alan Rappeport
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