MNI China Press Digest Jan 19: Yellen-Liu, Capital Flows, FDI

Highlights from Chinese press reports on Thursday:

The recent Liu-Yellen meeting signalled that China and the US must cooperate in the fields of finance, economics and trade, and the US should stop viewing the relationship as a zero-sum competition, according to an editorial by the Global Times. The positive tone of the meeting was a long overdue easing in the relationship amid a worsening economic outlook for 2023, the paper said. In the meeting, China expressed concern about US economic, trade and technological policies toward China, which impacted both sides. As the world's two largest economies, cooperation was an inescapable duty for the international community.

Cross border capital flows will remain stable in 2023 as China might be the only major economy with significant growth, said Wang Chunying, deputy director of the Foreign Exchange Bureau, according to Securities Daily. China will maintain a relatively large trade surplus as it promotes diversification of export markets and upgrades regional trade cooperation. With the economic recovery, the attractiveness of yuan assets will increase foreign investment in onshore securities, and China’s current account will maintain a reasonable surplus. The recent decline in inflation data in major developed economies may ease the pace of monetary tightening which will help capital inflows, he said.

China will improve its policies aimed at attracting foreign talent to China, Premier Li Keqiang told a gathering of international experts in Beijing. Measures on improving tax treatment, child schooling, visa issuance, and medical insurance would be taken to ease foreign worker conditions in China. Li said Beijing was willing to continue extensive international cooperation and adheres to protecting the interests of foreign investment in the country.