Think Tank: Weekend Call Between China, US May Have Been Tense
Two Asia Society Policy Institute experts said the readouts from the call over the weekend between Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng suggest the call was mostly logistical, planning for the next round of talks in Malaysia.
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The Chinese said the two sides held "candid, in-depth and constructive exchanges on important issues in bilateral economic and trade relations around the implementation of the important consensus reached in all previous calls between the two heads of state this year." They also agreed to "hold a new round of China-US economic and trade consultations as soon as possible," according to an unofficial translation of report from state-run news outlet Xinhua that was posted to the Chinese State Council website.
Wendy Cutler, senior vice president at the Asia Society Policy Institute, wrote in emailed statements that Bessent's readout "was terse, noticeably not using the word 'constructive' which was included in the Chinese report."
Bessent tweeted on Oct. 17, "This evening, Vice Premier He Lifeng and I engaged in frank and detailed discussions regarding trade between the United States and China. We will meet in-person next week to continue our discussions."
Lizzi Lee, a fellow on the Chinese economy at ASPI, wrote that China's phrase that the call was about implementing the leaders' consensus "suggests the call was largely procedural, aimed at keeping high-level communication open after the recent market turmoil rather than making substantive new progress. More meaningful exchanges are expected at next week’s in-person meeting in Malaysia, which could set the stage for the leadership summit later this month.
"After the Chinese Ministry of Commerce’s sweeping announcements, both the ministry and flagship state media outlets such as People’s Daily have tried to play down their impact, emphasizing that the measures are limited in scope and not intended to disrupt global supply chains. This recalibration of messaging suggests Beijing recognizes that its earlier escalatory rhetoric rattled markets and triggered more backlash than expected."
She said that while Beijing is trying to de-escalate, it's unknown how strictly they would implement the announced rare earth export controls, which are scheduled to take effect in December (see 2510160029).
Cutler also wrote, "The U.S. and China are not in a good spot in the lead up to a Trump-Xi meeting. High tariffs, restrictive export controls, substantial port fees, and Chinese investigations into U.S. companies are flooding the zone, making it more difficult to stabilize the relationship and work towards achieving a level playing field."
Lee concluded, "A relatively calm external environment remains critical for Beijing, and the reassurance to foreign investors is a positive signal, even amid a tense and deeply mistrustful atmosphere."