Liu He holds the finance portfolio in Xi Jinping's government.

MONEY & BUSINESS: Janet Yellen to meet with Chinese vice premier at Davos

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Treasury Secretary Janet Yellen is scheduled to meet with Chinese Vice Premier Liu He in Switzerland on Wednesday to discuss economic ties between the world’s two largest industrial powers.

The meeting will be held on the sidelines of the annual World Economic Forum in Davos, where top leaders in business, politics and media come together to discuss the burning issues of the day.

This year’s gathering — the first in-person event at the Alpine ski village since the coronavirus pandemic — kicked off Monday amid gloomy economic forecasts that include a possible global recession as well as continued high levels of inflation.

Two-thirds of private- and public-sector chief economists surveyed by the WEF expect a global recession in 2023, the Davos organizer said Monday.

The survey comes after the World Bank last week slashed its 2023 growth forecasts to levels close to recession for many countries as the impact of central bank rate hikes intensifies, Russia’s war in Ukraine continues, and the world’s major economic engines sputter.

The talks between Yellen and Liu, who holds the finance portfolio in President Xi Jinping’s government, are being billed by US officials as a follow-up discussion to the summit meeting between the Chinese premier and President Biden on the sidelines of the G20 conference in Bali this past November.

Biden and Xi agreed to have officials maintain dialogue in an effort to ease tensions between the two powers.

Liu is scheduled to address the World Economic Forum in Davos on Tuesday. It is the first overseas trip by a high-level Chinese government delegation since Beijing scrapped its controversial “zero COVID” policy last month.

Liu He holds the finance portfolio in Xi Jinping’s government.
Xinhua News Agency via Getty Ima

US relations with China have hit a rough patch, particularly after the Biden administration moved to restrict the sales of computer chip technology to Beijing.

The Biden administration also signed into law a bipartisan measure, the CHIPS Act, which is aimed at boosting domestic manufacturing of semiconductors.

Yellen will depart Davos for Africa, where she is scheduled to visit three countries — Senegal, Zambia and South Africa.

Washington is eager to improve relations with African governments that have thus far maintained extensive economic ties to rivals Russia and China.

In an interview on National Public Radio on Saturday, Yellen acknowledged that China had played “a leading role” in lending to and trading with African nations, but said African leaders had made clear at a conference last month in Washington that they were seeking more US engagement.

“It’s clear that they want to expand trade and investment with many parts of the world and see the United States as a critical partner in that growth. And that’s something that’s important to us as well,” Yellen said.

Yellen is also scheduled to visit three African countries this week.
Yellen is also scheduled to visit three African countries this week.

China’s trade relationship with Africa is four times that of the US. Beijing has also boosted its influence on the continent by offering cheaper loans than those of Western countries.

But some African countries, including Zambia, have soured on Chinese lending and are looking for alternatives, economic analysts told Reuters.

Sign reading "Davos"
Top leaders in business, politics and media gathered in Davos, Switzerland, on Monday to kick off the World Economic Summit.

Yellen has also called on China explicitly to end its relationship with Russia as the Kremlin continues its invasion of Ukraine.

The US and its European and Asian allies have imposed sanctions and an oil price cap on Russia in retaliation for the war, putting China in a difficult spot as it had promised a “no limits” friendship with Russia before the invasion began.

It will be Yellen’s first in-person meeting with Liu since taking office and follows three virtual meetings between them.

With Post wires

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