US Treasury Secretary Janet Yellen says she and Chinese Vice Premier He Lifeng have agreed to launch exchanges on balanced economic growth, an effort partly aimed at addressing US concerns about China's excess manufacturing capacity.
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After two days of economic talks in China's southern export hub of Guangzhou, Yellen said she and He also agreed to start a forum to co-operate on anti-money laundering efforts in their respective financial systems.
The exchanges "will facilitate a discussion around macroeconomic imbalances, including their connection to overcapacity, and I intend to use the opportunity to advocate for a level playing field for American workers and firms", Yellen said in a statement released after the talks.
She characterised the discussions as productive and frank.
Coming into her four-day visit to China, her top priority was to persuade Chinese officials to rein in excess production capacity for electric vehicles, solar panels and other clean energy technology that threaten competing firms in the US and other countries.
Chinese state media pushed back on her excess capacity arguments, calling them a "pretext" for protectionist US policies.
Such comments seek to undermine China's domestic growth and international co-operation, and Washington should focus on fostering innovation and competitiveness within its borders instead of resorting to "fear-mongering", state news agency Xinhua said in an editorial late on Friday.
Yellen, He and their teams held more than four-and-a-half hours of meetings on Saturday on a range of topics, with US concerns about China's growing exports of electric vehicles, solar panels and other goods the biggest priority for the Treasury chief.
They discussed the excess capacity issue for more than two hours, Yellen told reporters on Saturday afternoon.
"I think the Chinese realise how concerned we are about the implications of their industrial strategy, for the United States, for the potential to flood our markets with exports that make it difficult for American firms to compete," Yellen said.
"And then other countries have the same concern."
She said that the forum would provide a "structured" way to discuss a complicated issue, but that it would take some time to resolve.
"I think they have heard that this is an important issue to us.
"It's going to be critical to our bilateral relationship going forward and to China's relationship with other countries that are important."
She added that Chinese officials were "more confident" about the economy after putting in place policies to address issues in the property sector and local government debt.
The discussions on economic relations and global challenges between He and Yellen were "candid, pragmatic and constructive", Xinhua said in a statement on Saturday, confirming both parties had agreed to further discuss balanced growth and financial stability.
Beijing also expressed serious concerns about US economic and trade restrictions on China and made a full response to the production capacity issue during the talks, it said.
Yellen also warned Chinese firms faced "significant consequences" if they provided material support to Russia's war effort.
The Chinese side emphasised that their policy was not to provide such support and did not want this to be a bilateral issue, she said.
Yellen will travel on Saturday to Beijing, where she will meet officials including Premier Li Qiang, Finance Minister Lan Foan and People's Bank of China Governor Pan Gongsheng.
Australian Associated Press
