Yellen schedules surprise meeting with Chinese vice premier in Switzerland

Both “exchange views on macroeconomic developments and other economic issuesthe Treasury Department said in a statement.

China’s Ministry of Commerce confirmed the meeting on Monday night, saying it is aimed at strengthening economic and financial policy coordination as well as implementing agreements reached during a summit between Chinese President Xi Jinping and Joe Biden in end of last year. The ministry assured that both commercial teams have maintained a “strong communication”.

The surprise announcement follows the meeting between Biden and Xi in November on the sidelines of the G20 summit in Bali, Indonesia. That was the first face-to-face session of the heads of state and it began a modest thaw in relations between the two governments.

Despite that, Wednesday morning’s meeting in Switzerland could prove contentious as Washington and Beijing continue to spar over trade, human rights and Taiwan autonomy. In recent months, Yellen has championed a so-called “friend-shoring” policy that would make the United States and its allies less dependent on China for supplies of critical goods.

That and efforts to deny China access to other technologies, including advanced semiconductors, have led Beijing to accuse the United States of economic protectionism and file a dispute with the World Trade Organization (WTO).

Secretary of State Antony Blinken is scheduled to visit Beijing in early 2023. Yellen said in December that she had no specific plans for a similar trip but was open to the possibility.

In addition to tackling various sensitive issues, Yellen could also use the Zurich meeting to question Liu about the state of China’s economy and the direction of economic policy following Xi’s consolidation of power at the Communist Party congress in October.

In November, Yellen told Bloomberg News that Xi’s tightening grip on power and the turnover of top officials in Beijing had increased uncertainty about which direction the world’s second-largest economy would take. Yellen might take the opportunity to ask about a number of recent developments that suggest the new leadership team is indeed willing to give more space and support to the private sector.

Liu, with whom the secretary has held three video conferences, is among the officials expected to leave their current post when Xi presents his new government in March.