US ends a decade-old economic dialogue with China as relations sour

The Trump administration ended a decade-old formal economic dialogue with China because it believes the country is moving backward on opening its markets to foreign competition, a top Treasury Department official said Sunday.

The administration is “disappointed” with China and “because there wasn’t a path back toward a market orientation, I discontinued the China economic dialogue,” said David Malpass, Treasury’s undersecretary for international affairs. Rather than holding formal discussions, Secretary Steven Mnuchin has frequent private talks with senior-level officials in China to bring back focus to free-market capitalism, he said.

“One of the things we are doing is trying to keep open lines of communication with them even as we express concern” about the growing influence of China’s state-owned enterprises, Malpass said, speaking in Buenos Aires ahead of the Group of 20 finance ministers meeting.

Mnuchin’s halting of the main economic channel between the US and China — known as the Comprehensive Economic Dialogue — ends conversations started under one of his predecessors, Hank Paulson, during the George W. Bush administration. Paulson singled out an economic track for the Treasury Department to lead, becoming the point-person on all such matters between the nations.

The first Comprehensive Economic Dialogue during the Trump administration fell apart in July 2017. The two super-powers were unable to produce a joint statement after Commerce Secretary Wilbur Ross scolded China over its trade imbalance with the US in his opening remarks. Both sides canceled a planned closing news conference.

“After 10 years of discussions, certainly the U. has grown frustrated with the lack of progress” that resulted from the Comprehensive Economic Dialogue, said Timothy Adams, president of the Washington-based Institute of International Finance and a former Treasury undersecretary in the George W Bush administration.