Washington and Beijing should communicate “directly” on concerns about specific economic practices, US Treasury Secretary Janet Yellen said on Saturday, urging greater cooperation between the world’s two biggest economies despite fraught ties.

Yellen is on a four-day trip to Beijing as the United States seeks to cool tensions and stress areas of collaboration between the two countries.

In a meeting on Saturday with Vice Premier He Lifeng, she pointed to record bilateral trade last year as proof of just how intertwined they are.

“There is ample room for our firms to engage in trade and investment,” she told He at the Diaoyutai state guesthouse.

“Where we have concerns about specific economic practices, we should and will communicate them directly.”

Vice Premier He said Beijing regretted that “unexpected incidents” had derailed efforts to improve ties following a meeting between Presidents Joe Biden and Xi Jinping in November.

“There were some problems in the implementation of the consensus reached by the two heads of state,” he said.

But following Yellen’s visit this week and her Friday meeting with Premier Li Qiang, he added, “China will earnestly implement the consensus reached between you and Premier Li Qiang and turn it into concrete actions”.

Her bilateral meeting with He lasted around five hours and was followed by a dinner.

A Treasury statement said she raised issues of concern in the “candid” talks, while discussing the US approach of healthy economic competition.

China’s official Xinhua news agency added that China “expressed concern” on US sanctions and restrictions but both sides agreed to boost cooperation on global challenges.

Yellen also met the party chief of China’s central bank Pan Gongsheng on Friday, speaking on global macroeconomic and financial developments, the Treasury added in a separate statement.

While emphasising areas where the two powers need to work together, she has defended US moves to “de-risk” its economy from China, and tackle what Washington sees as unfair treatment of American businesses.

Yellen told a roundtable of experts in China on Saturday that collaboration between the two powers on climate financing was “critical”.

“As the world’s two largest emitters of greenhouse gases and the largest investors in renewable energy, we have both a joint responsibility — and ability — to lead the way,” she said.

“The United States and China must work together to address this existential threat,” she added.

Saying that “climate finance should be targeted efficiently and effectively”, she pressed China to support existing multilateral institutions such as the Green Climate Fund.

“Both our economies seek to support partners in emerging markets and developing countries as they strive to meet their climate goals, and I believe continued US-China cooperation on climate finance is critical.”

China last year briefly said it was suspending talks on the climate after Nancy Pelosi, then speaker of the House of Representatives, visited Taiwan — the self-ruled democracy claimed by Beijing.

But there are signs talks could restart, with US envoy John Kerry due to travel to China to discuss cooperation on climate change.

Yellen also said in her meeting with Chinese Premier Li that it was key for both countries to closely communicate on global economic affairs, while making joint efforts on international challenges such as debt distress.

‘Big ticket items’

The Treasury chief’s high-level meeting with Li likely “set the tone” for the rest of her visit, said Lyu Xiang, a Sino-US relations expert at the Chinese Academy of Social Sciences.

On Saturday, Yellen also spoke with women economists, stressing that the US-China relationship was “rooted in the solid ties” between the American and Chinese people.

“It is important that we keep nurturing and deepening these ties,” especially as China reopens its economy after pandemic-related lockdowns, she said, adding that the US may have differences with the Chinese government, but not with its people.

Yellen likely aimed to drill down into more specific issues on Saturday, ranging from the macroeconomy to trade and technology exports, Lyu told AFP.

But a key question is whether “big ticket items that are in the category of global challenges”, like debt distress and climate cooperation, get bumped to the top of the agenda, said Lindsay Gorman, senior fellow for emerging technologies at the German Marshall Fund of the United States.

Yellen’s talks on Saturday followed meetings with US companies, which have expressed concerns ranging from level playing fields with the Chinese to reduced people-to-people exchanges and an uncertain business climate in the face of a national security crackdown.

“Anything that can help make the US-China relationship better, number one, will help the companies here, the investment sentiment, and two, just give us more opportunity to cooperate,” Michael Hart, president of the American Chamber of Commerce in China, told AFP.