(Bloomberg) -- The Biden administration dispatched a top Treasury Department official to a meeting with Chinese regulators and Wall Street executives this month as the administration navigates its approach toward the Asian rival.
David Lipton, senior counselor to Treasury Secretary Janet Yellen and a former top International Monetary Fund official, participated virtually in the September meeting where Chinese officials talked with top U.S. investors, according to people familiar with the attendees.
The gathering featured People’s Bank of China Governor Yi Gang as well as senior emissaries from the U.S. business community, including Ken Griffin from Citadel, Abby Johnson of Fidelity Investments, BlackRock Inc.’s Larry Fink and Blackstone Inc. Chairman Stephen Schwarzman.
Lipton’s participation comes against a backdrop of opposition in the Biden administration to any fully fledged revival of regular U.S.-China economic engagement of the kind that was abandoned during President Donald Trump’s time. The Strategic and Economic Dialogue mechanism during the era of the Obama administration had been led by the Treasury.
The White House is still crafting its policy towards Beijing -- particularly on the economic front. Moves in the financial sphere, meantime, have tightened scrutiny of Chinese companies listed in the U.S.
The roundtable that Lipton attended this month was first convened in September 2018.
A Treasury official said that Lipton’s participation as a representative of the U.S. government was not out of the ordinary, given the topic and other attendees. The official added that Lipton stressed at the meeting that certain Chinese policies are harmful to the U.S., and the world.
The Treasury’s priority is for China to end trade practices that disadvantage American businesses, not to protect U.S. investment in China, the official said.
Treasury spokeswoman Alexandra LaManna said Lipton “reiterated the administration’s China policy at the meeting.”
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Global investors have been unnerved recently by a regulatory onslaught from Beijing targeting its biggest technology companies and other industries. President Xi Jinping’s push for “common prosperity” has also raised questions about policy makers’ approach toward private capital and profit-making.
Billions of dollars in potential earnings are at stake for Wall Street, which has been expanding in China as the nation opens its financial markets to investment banks, wealth and money managers.
Some Biden administration officials have privately voiced concern at the increase of U.S. investment in China and the potential national security risks stemming from American dollars flowing into industries that Beijing has deemed strategic.
The Biden team is still reviewing policies it inherited from the Trump administration, including a partial trade deal that Beijing has fallen short on and hundreds of billions of dollars in tariffs that some officials say don’t offer the leverage they once did in getting China to the negotiating table.
The U.S. financial sector gained more market access in China as part of the phase one trade agreement sealed during the Trump administration.
But Republican lawmakers have sought tighter controls of investment flows into China and have criticized the White House for moving slowly on further increasing export bans for key technologies.
National Security Adviser Jake Sullivan in February said the administration is taking a different approach to trade policy with Beijing, one that at its core is focused on American workers and not on helping companies or Wall Street.
“We’re not about trying to make the world safe for multinational investment,” Sullivan said during a press briefing on Feb. 4. “So our priority is not to get access for Goldman Sachs in China; our priority is to make sure that we are dealing with China’s trade abuses that are harming American jobs and American workers.”
A National Security Council spokeswoman said in response to questions about Lipton’s attendance at the meeting that the U.S. position across the government has not changed and that it remains true the Biden administration’s priority is not to get access for the financial sector but to create jobs and raise wages at home.
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