Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng are set to meet in San Francisco for two days of talks aimed at addressing economic issues between the United States and China. These discussions will lay the groundwork for a potential meeting between President Joe Biden and Chinese President Xi Jinping, which is expected to take place on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco next week. While the White House does not anticipate any major changes to the relationship between the two nations as a result of the meeting, it hopes to see signs of progress.

The competitive nature of the US-China relationship has led analysts to caution against having high expectations for the talks. Nicholas Szechenyi, deputy director for Asia at the Center for Strategic and International Studies, pointed out that the primary driver for the US economic strategy in the Indo-Pacific region is economic competition rather than cooperation. This sentiment is reflected in the executive order signed by President Biden in August to regulate and block high-tech US-based investments going towards China, as well as the US move to block exports of advanced computer chips to China last year. Lawmakers have also held hearings contemplating whether to ban the popular app TikTok due to its Chinese connections over concerns about data security and harmful content.

Tensions between the two countries have escalated throughout the year. Earlier this year, a Chinese surveillance balloon was spotted traveling over sensitive US airspace, leading to its downing by the US military. China claimed the incident was an accident involving a civilian aircraft and threatened repercussions. However, despite these tensions, efforts have been made by both nations to smooth economic ties. President Biden had a phone call with Chinese Foreign Minister Wang Yi last month, and Secretary Yellen has met with several Chinese officials throughout the year. In July, Yellen traveled to China to discuss economic policies and urged cooperation on climate change and other global challenges.

In September, the US Treasury Department and China's Ministry of Finance launched economic working groups in an attempt to ease tensions and deepen ties between the two countries. The upcoming talks between Yellen and He will further contribute to these efforts. Yellen is expected to emphasize the importance of resilience and open communication to prevent disagreements from escalating into conflict. Climate change is also expected to be a significant topic of discussion during the talks.

Nevertheless, tensions persist, particularly regarding US export controls on advanced technology and China's economic practices that allegedly disadvantage US companies and workers. The United States has also expressed concerns about China's assertiveness in the East and South China Seas. Recent incidents, such as a Chinese fighter jet flying close to an American B-52 bomber and intercepts of US warplanes by Chinese aircraft, have raised alarm among US military officials.

The meeting between Yellen and He will serve as a crucial opportunity for the US and China to address their economic issues and work towards a more cooperative relationship. While major changes may not result from this meeting, the hope is that it will pave the way for progress and improved communication between the two nations. Both sides are aware of the challenges they face but also recognize the importance of finding common ground and preventing conflicts from escalating.