The US is not seeking to decouple its economy from China or limit the country’s growth, the Treasury’s top international official has said.
We occasionally have issues with different economic policies in China and we will always defend US economic interests as well – but we will not in any way be trying to separate these two economies entirely,” Jay Shambaugh, Treasury Undersecretary for International Affairs, said in an interview with Bloomberg Television. “This is neither practical nor in our interest.”
Relations between the US and China have deteriorated sharply in recent years as they increasingly see each other as the top strategic and economic threat. While the countries’ leaders, Joe Biden and Xi Jinping, sought a smoother path since meeting face-to-face last November, fresh disputes have arisen over issues including the security of Taiwan, spying allegations, technology security and Russia’s invasion of Ukraine.
The worsening relations have weighed on the global economic outlook, the International Monetary Fund warned last week. The fund said tensions between the US and China drive geopolitical fragmentation and risk damaging the global economy, with foreign direct investment and other capital flows increasingly being channelled toward aligned blocs of countries.
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Mr Shambaugh’s remarks come as finance ministers and central bank governors from around the world start gathering in Washington for the IMF-World Bank spring meetings, where the issue of debt relief for poorer nations is expected to feature prominently in discussions.
The US and other developed countries have repeatedly blamed Beijing for being unwilling to engage in debt reduction after having ramped up lending to poorer countries.
Treasury officials will be talking to their Chinese counterparts this week, Mr Shambaugh said, noting that the world’s two biggest economies need to be able to collaborate, especially when it it comes to addressing global issues.
“The world expects us to be able to work together on some of these big challenges whether its climate or debt,” Mr Shambaugh said.
Efforts to negotiate sovereign-debt restructurings in developing countries like Zambia have stalled, leaving those economies in limbo.