The United States and China agreed to launch "extensive" exchanges on balanced growth in domestic and global economies, the US Treasury Department announced on Saturday.

It comes after extended talks between US Treasury Secretary Janet Yellen and Vice Premier He Lifeng on Friday and Saturday.

The exchanges "will facilitate a discussion around macroeconomic imbalances, including their connection to overcapacity, and I intend to use the opportunity to advocate for a level playing field for American workers and firms," Yellen said

Yellen made her second visit to China in a year to stabilize ties between the world's two leading economies.

US concerns about China's manufacturing capacity

During the conversation with Hu, Yellen expressed concerns about China's excess manufacturing capacity.

The United States sees overcapacity as a risk as a surplus of cheap goods that threatens manufacturing elsewhere.

"I think the Chinese realize how concerned we are about the implications of their industrial strategy for the United States, for the potential to flood our markets with exports that make it difficult for American firms to compete," Yellen told reporters.

"It's not going to be solved in an afternoon or a month, but I think they have heard that this is an important issue to us."

Yellen said the exchanges "will facilitate a discussion around macroeconomic imbalances, including their connection to overcapacity, and I intend to use the opportunity to advocate for a level playing field for American workers and firms."

Chinese state media pushed back on her excess capacity arguments, calling them a "pretext" for protectionist US policies.

US-China tensions

The treasury secretary is due to travel to Beijing later on Saturday, where she is scheduled to meet officials including Premier Li Qiang, Finance Minister Lan Foan and People's Bank of China Governor Pan Gongsheng, the Treasury said. Her visit concludes on Monday.

Despite growing tensions between Beijing and Washington in recent years, a meeting between US President Joe Biden and Chinese President Xi Jinping in San Francisco in November contributed to a warming of bilateral ties.

US Secretary of State Antony Blinken is also expected to soon visit China again in a sign that the two sides are striving to return to more settled relations.

rmt/lo (AFP, AP, Reuters)