WASHINGTON: The United States and China on Friday announced two new working groups on economic and financial policy, in the latest effort to stabilize fraught relations between the world’s biggest economies. The formation of the groups was agreed during talks in July between US Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng in Beijing, the Treasury Department said. Chinese state broadcaster CCTV also announced the launch of an “Economic Working Group” and “Financial Working Group,” saying both will hold “regular and irregular meetings to strengthen communication and exchange on relevant issues.”

“My trip to China aimed to establish a durable channel of communication between the world’s two largest economies, consistent with President (Joe) Biden’s guidance following his meeting with President Xi (Jinping) in Bali,” said Yellen in a social media post announcing the new groups. “It is vital that we talk, particularly when we disagree.” The Economic Working Group will discuss macroeconomic issues, while the Financial Working Group will focus on regulatory and financial stability issues, a senior US Treasury Department official said.

“The two groups will meet at the Vice Minister level on a regular cadence and report to Secretary Yellen and Vice Premier He,” said the Treasury Department. The economic group will be led by the US Treasury and China’s finance ministry, while the financial group will include the Treasury and the People’s Bank of China, the US statement said. The United States and China saw relations hit their lowest point in years in February, when US forces shot down a balloon Washington said was being used by Beijing to spy on its territory.

That followed a visit to Taiwan last year by Nancy Pelosi, then the speaker of the US House of Representatives, which made her the most senior US politician to visit the island in over two decades. Beijing claims Taiwan as its own territory and balks at any official contact Taipei has with other countries. Since the balloon incident, the two sides have restarted high-level contacts, with US Secretary of State Antony Blinken visiting Beijing in June, with several others—including Yellen—following after.

The Biden administration has, however, continued imposing restrictions on trade with China in areas it considers crucial to national security, including high-end semiconductors. In August, Biden signed an executive order restricting certain American investments in sensitive high-tech areas in China—a move Beijing blasted as being “anti-globalization”. –AFP