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Beijing /Â AP
China agreed to try to slash excess output of steel, avoid competitive devaluations of its currency and to wind down unprofitable “zombie enterprises,” US Treasury Secretary Jacob Lew said on Tuesday as the two countries wrapped up annual high-level meetings in Beijing.
The commitment to persist with reforms to make China’s economy more balanced included specific steps for opening its financial sector wider to U.S. companies, Lew told reporters.
“It is clear from our discussions that China’s leaders recognize the need to reform China’s economy and its growth model,” he said.
The two-day annual Strategic & Economic Dialogue, a meeting of Cabinet-level foreign affairs, trade and other officials from both sides, is meant to head off conflict. It rarely produces agreements on major issues, but allows officials to air disputes, clear up misunderstandings and share experiences.
The U.S. agenda included pressing Beijing to move faster in shrinking its bloated industries including steel, which its trading partners complain is flooding their markets with unfairly cheap exports.
Lew said the two sides were unable to “come to common understanding” on the issue of excess production of aluminum, another trade flashpoint for the two countries, but agreed to continue discussing the problem.
Beijing also agreed there is no reason for a sustained weakening of its currency, the yuan, Lew said.
He said Chinese officials reaffirmed a commitment to not engage in “competitive devaluations and not target the exchange rate for competitive purposes.”
Aluminum and steel are among major Chinese exports that its trading partners complain are hurting their own producers and threatening jobs. Washington has imposed anti-dumping tariffs on steel, and European officials say they have launched a trade investigation.
Beijing announced plans this year to slash the size of its state-owned steel and coal industries at a cost of millions of jobs. But plans for other bloated sectors, including aluminum, glass and solar panels, have yet to be announced. Speaking at the event’s opening ceremony, Chinese President Xi Jinping promised action on reducing overcapacity but announced no new initiatives.
On the environment, envoys from both sides pledged to ensure the Paris agreement is ratified and to persuade other governments to put it into action.
This year’s event is led by Secretary of State John Kerry and Lew on the U.S. side and Vice Premier Wang Yang and State Councilor Yang Jiechi on the Chinese side.