US Treasury Secretary Janet Yellen and Chinese Premier Li Qiang expressed hope for US-China cooperation.
The American politician, who visited Beijing, nevertheless noted that the two countries cannot avoid difficult talks.
"US-China relations can only develop with direct and open communication," Yellen told Li after arriving in the Chinese capital from the southern city of Guangzhou.
In welcoming Yellen, Li said that "China sincerely hopes that the two countries will be partners, not adversaries."
He added that Chinese netizens have been closely following her travel details since her appearance in Guangzhou, which shows "expectation and hope that China-US relations will continue to improve."
Yellen held a series of meetings in the southern port city, including hours-long discussions with her counterpart, Vice Premier He Lifeng.
The two countries have since agreed to hold talks on balanced growth under an existing working group, which will allow officials to discuss the key US topic of "overcapacity".
This refers to a situation where the Chinese government's support for industry is fueling production capacity, but risks leading to a sharp increase in exports to the world market at cut-price prices, undercutting international competitors.
Washington is particularly concerned about this phenomenon in emerging industries such as electric cars and solar energy.
Yellen's trip is her second visit to China in less than a year.
"Although we still have a lot of work to do, I believe that over the past year we have put our bilateral relations on a more stable footing," she said in her opening remarks to Premier Li as she began two days of high-level talks in Beijing.
Rather than avoiding difficult conversations, it means "understanding that we can only make progress if we communicate directly and openly with each other," the Treasury chief said.
Ahead of talks with Beijing's mayor, Yellen also stressed the need to engage with local authorities to understand "China's economic future."
"Local governments play a crucial role, from stimulating consumption to dealing with overinvestment, and Beijing is of course particularly important," she said.
The tension remains
Yellen explained that the two countries - the world's two largest economies - have a duty to "responsibly manage our complex relationship" and show leadership when it comes to working on global challenges.
The U.S. Treasury Department also announced that officials from the United States and China will begin talks under another existing anti-money laundering cooperation task force.
The aim is to cut off the funding of entities such as drug traffickers.
Washington is seeking to work with Beijing to curb supply lines for the production of fentanyl, the synthetic painkiller at the heart of the overdose epidemic in the US.
Despite the results of the meetings so far, the Chinese state news agency Xinhua warned in a commentary about the "specter of protectionism" in the US.
She criticized existing US tariffs on Chinese imports, while accusing Washington of "suppressing" China's electric vehicle industries.
Another state media outlet, the Global Times, pointed in an editorial to the "negative actions towards China", citing US trade and technology restrictions and the "ever-growing list of sanctions against Chinese companies".
Opportunity for advancement
"Yellen's visit opened up a space to examine the possibility of progress," Brookings Institution senior fellow Ryan Haas told AFP.
He added that her trip "showed that the Chinese recognize the need to engage with overcapacity and are willing to explore opportunities for anti-money laundering cooperation."
But only time can tell if these efforts will lead to substantial progress.
During her meetings with Vice Premier He, Yellen also warned companies in China against supporting Russia's war in Ukraine, including Moscow's defense industrial base. She warned of "significant consequences".
During her stay in Beijing, Yellen will also meet with the city's mayor Yin Yong and Chinese Finance Minister Lan Foan.
On April 8, he will talk with former Vice Premier Liu He and Central Bank Governor Pan Gongshen. /BGNES
