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By David Lawder
WASHINGTON (Reuters) - The Biden administration is sending five senior U.S. Treasury officials to Beijing this week for economic talks that will focus heavily on China's "non-market" policies that are adding excess industrial capacity, a Treasury official said on Monday.
The delegation, led by Treasury Undersecretary for International Affairs Jay Shambaugh, plans to hold frank conversations as part of the U.S-China Economic Working Group about Beijing subsidies that encourage overproduction of goods that threaten to flood global markets with cheap imports, the official said.
These include electric vehicles, an industry the Biden administration is trying to develop in the United States with its own tax subsidies.
The group will discuss the U.S. and Chinese economic outlooks, investment screening regimes for national security in both countries and opportunities to cooperate on climate change and debt relief to poor countries, the Treasury official said.
The emphasis on China's industrial subsidies comes as the Biden administration is continuing a review of U.S. tariffs imposed on hundreds of billions of dollars worth of Chinese imports by former President Donald Trump.
U.S. Treasury Secretary Janet Yellen and other senior administration officials have called for the punitive duties of up to 25% to be shifted to a more strategic focus.
Trump, the expected Republican presidential nominee, has signaled he would double down on stronger tariffs if elected, calling for China's most-favored nation trading status to be revoked, a move that would effectively raise nearly all tariffs on Chinese goods. Biden is expected to take a tough but more nuanced approach to China
The meeting is the third since Yellen and her Chinese counterpart, Vice Premier He Lifeng, launched the group and a parallel Financial Working Group in September.
It will be the first meeting in Beijing. The group last met in San Francisco ahead of November's Asia Pacific Economic Cooperation Summit after an initial virtual meeting.
(Reporting by David Lawder, additional reporting by Jose Joseph in Bengaluru, Editing by Louise Heavens and Cynthia Osterman)
