China-U.S. Economic Working Group Meeting- China Concerned about Tariff Increase, U.S. Raised Overcapacity

On October 25, during the World Bank and International Monetary Fund Annual Meetings in Washington, D.C., China’s Vice Minister of Finance, Liao Min, co-hosted the sixth meeting of the U.S.-China Economic Working Group (EWG) with U.S. Deputy Secretary of the Treasury, Jay Shambaugh. The Chinese delegation emphasized the current macroeconomic situation in China and the rollout of a series of stimulus policies, while also expressing concerns over U.S. tariffs on China and sanctions related to Russia. In response, the U.S. side raised continued concerns regarding China’s excess capacity and its impact on American workers and businesses.

Following the meeting, the Chinese Ministry of Finance announced that discussions were held on both countries’ macroeconomic policies, addressing global challenges, and cooperating to assist low-income countries facing liquidity issues, as well as planning for future communications.

The press release from the Chinese Ministry also noted that Liao Min had a courtesy meeting with U.S. Treasury Secretary Janet Yellen after the EWG session.

According to a statement from the U.S. Treasury on October 25, attendees discussed recent macroeconomic policy trends in both the U.S. and China, including China’s announcement of several stimulus measures. The dialogue also explored areas for collaboration, particularly in supporting low-income nations dealing with liquidity challenges. The U.S. reiterated its concerns regarding China’s overcapacity and its implications for American industry.

Yellen emphasized the importance of the Economic Working Group as a communication channel between the two nations. The press release highlighted that the EWG was established in September 2023 under the leadership of Yellen and China’s Vice Premier He Lifeng, with the group directly reporting to both leaders.

The fifth EWG meeting took place from September 19 to 20 in Beijing, where Liao Min and Shambaugh also co-chaired discussions involving relevant economic departments from both countries. During that meeting, China formally addressed serious concerns about U.S. tariffs, investment restrictions, sanctions related to Russia, and actions impacting Chinese enterprises. Meanwhile, the U.S. raised issues related to China’s increasing overcapacity, non-market practices, and support for Russia in the Ukraine conflict.