ZURICH (AP) — U.S. Treasury Secretary Janet Yellen met Wednesday with her Chinese counterpart and pledged an effort to manage differences and “prevent competition from becoming anything ever near conflict” as the two nations try to thaw relations.

Yellen’s first face-to-face meeting with Vice Premier Liu He was the highest-ranking contact between the two countries since their presidents agreed last November to look for areas of potential cooperation.

Liu, for his part, said he was ready to work together to seek common ground between China and the U.S.

“No matter how circumstances change, we should always maintain dialogue and exchanges,” he said.

The meeting comes as the U.S. and Chinese economies grapple with differing, but intertwined challenges on trade, technology and more.

Yellen, in opening remarks in front of reporters, told Liu: “While we have areas of disagreement, and we will convey them directly, we should not allow misunderstandings, particularly those stemming from a lack of communication, to unnecessarily worsen our bilateral economic and financial relationship.”

She said the two countries “have a responsibility to manage our differences and prevent competition from becoming anything even near conflict.”

Both economies have their challenges.

The Chinese economy is reopening after a COVID-19 resurgence killed tens of thousands of people and shuttered countless businesses. The U.S. is slowly recovering from 40-year-high inflation and is on track to hit its statutory debt ceiling, setting up an expected political showdown between congressional Democrats and Republicans. The debt issue is of keen interest to Asia, as China is the second-largest holder of U.S. debt.

There is also the Russian invasion of Ukraine, which hinders global economic growth — and has prompted the U.S. and its allies to agree on an oil price cap on Russia in retaliation, putting China in a difficult spot as a friend and economic ally of Russia.

And high interest rates globally have increased pressure on debt-burdened nations that owe great sums to China.

“A wrong policy move or a reversal in the positive data and we could see the global economy head into a recession in 2023,” said Josh Lipsky, senior director of the Atlantic Council’s GeoEconomics Center. “Both countries have a shared interest in avoiding that scenario.”

The World Bank reported last week that the global economy will come “ perilously close ” to a recession this year, led by weaker growth in all the world’s top economies — including the U.S. and China. Low-income countries are expected to suffer from any economic downturns of superpowers, the report said.

“High on the list is debt restructuring,” Lipsky said of Wednesday’s talks. Several low-income countries are at risk of debt default in 2023 and many of them owe large sums to China.

“Leaders have been trying for two years to get some agreement and avoid a wave of defaults but there’s been little success and one reason is China’s hesitancy. I expect Yellen to press Liu He on this in the meeting,” Lipsky said.

Liu laid out an optimistic vision for the world’s second-largest economy in an address Tuesday at the World Economic Forum in Davos, Switzerland.

“If we work hard enough, we are confident that in 2023, China’s growth will most likely return to its normal trend. The Chinese economy will see a significant improvement,” he said.

After her stop in Switzerland, Yellen will travel to Zambia, Senegal and South Africa this week in what will be the first in a string of visits by Biden administration officials to sub-Saharan Africa during the year.

Zambia is renegotiating its nearly $6 billion debt with China, its biggest creditor. During a closed-door meeting at the Africa Leaders Summit in Washington in December, Yellen and Zambian President Hakainde Hichilema discussed “the need to address debt sustainability and the imperative to conclude a debt treatment for Zambia,” according to Yellen.

The Zurich talks are a follow-up to the November meeting between President Joe Biden and China’s Xi Jinping on the sidelines of the Group of 20 summit in Bali, Indonesia. The two world leaders agreed to empower key senior officials to work on areas of potential cooperation, including tackling climate change and maintaining global financial, health and food stability. Beijing had cut off such contacts with the U.S. in protest of then-House Speaker Nancy Pelosi’s trip to Taiwan in August.

“We’re going to compete vigorously. But I’m not looking for conflict,” Biden said at the time.

U.S. Secretary of State Antony Blinken will be traveling to China in early February.

Among economic sticking points, the Biden administration blocked the sale of advanced computer chips to China and is considering a ban on investment in some Chinese tech companies, possibly undermining a key economic goal that Xi set for his country. Statements by the Democratic president that the U.S. would defend Taiwan against a Chinese invasion also have increased tensions.

And while the U.S. Congress is divided on many issues, members of the House agreed last week to further scrutinize Chinese investments.

New House Speaker Kevin McCarthy of California has identified the Communist Party of China as one of two “long-term challenges” for the House, along with the national debt.

“There is bipartisan consensus that the era of trusting Communist China is over,” McCarthy said from the House floor last week when the House voted 365 to 65 — with 146 Democrats joining Republicans — to establish the House Select Committee on China.

Last year, the U.S. Commerce Department added dozens of Chinese high-tech companies, including makers of aviation equipment, chemicals and computer chips, to an export controls blacklist, citing concerns over national security, U.S. interests and human rights. That move prompted the Chinese to file a lawsuit with the World Trade Organization.

Yellen has been critical of China’s trade practices and its relationship with Russia, as the two countries have deepened their economic ties since the start of the war in Ukraine. On a July call with Liu, Yellen talked “frankly” about the impact of the Russia’s invasion of Ukraine on the global economy and “unfair, non-market” economic practices, according to a U.S. recap of the call.

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WASHINGTON (AP) — For nine months under President Joe Biden, the U.S. has pursued a diplomatic strategy that could be characterized as about China, without China.

On security, trade, climate and COVID-19, the Biden White House has tried to reorient the focus of the U.S. and its allies toward the strategic challenges posed by a rising China — all while there has been little direct engagement between the two rivals.

The president is now preparing for a pair of global summits where he again won’t be meeting with China’s Xi Jinping but the tensions and aggravations between the world’s two largest economies will nonetheless be on ready display.

Biden heads first to the Group of 20 summit in Rome this weekend after months of still-unresolved negotiations over his proposals to invest billions more in U.S. workers and key industries. He’s promoted those policies by offering them as the solution to a generational threat posed by China and by exhorting the rest of the world to join his cause.

But Xi has chosen to skip the G-20 — and a next-up summit on climate in Scotland — because of COVID-19, an absence that might be the most consequential aspect of the gatherings, as the world waits to see what China’s commitments will be to cutting greenhouse gas emissions. Instead, the Chinese leader will participate virtually in some events, missing the informal pull-asides and conversations that often yield the most progress at international summits.

Since he took office in January, Biden has spoken to Xi just twice, though they have agreed to meet virtually at some point by the end of the year. The U.S. leader aimed to prioritize shoring up America’s domestic and international positioning before seeking a direct one-on-one with Xi, but now there appears to be a tinge of regret that a meeting won’t take place sooner.

“In an era of intense competition between the U.S. and China, intense diplomacy at the highest levels, leader-level diplomacy is vital to effectively managing this relationship,” White House national security adviser Jake Sullivan said Tuesday as he previewed the trip.

Yet China is never far from Biden’s mind. And the president wants it at the forefront of voters’ thoughts too.

He hints at the ascendant power in nearly every speech he delivers. He invokes the need to counter and cajole China in major policy pronouncements on everything from the U.S. withdrawal from Afghanistan to his ongoing push for trillions in domestic infrastructure and social spending.

“In the race for the 21st century between democracies and autocracies, we need to prove that democracies can deliver,” Biden said this summer as he pledged American COVID-19 vaccines for the world. He heralded the same “great debate” over the effectiveness of democracies earlier this month as he made the case for Congress to swiftly raise the nation’s debt limit.

“Our infrastructure used to be the best in the world,” Biden said this month, as he pitched his spending bills, arguing that passing his priorities was about more than mere symbolism. “Twelve other nations have superior infrastructure to us, and China has trains that go 230 miles an hour for long distances.”

Yet the painful months-long slog of negotiations over his spending package, which includes hundreds of billions to help the U.S. shift away from fossil fuels, may hamper Biden’s ability to pressure China to make its own environmental commitments. China has ramped up coal production amid recent electricity outages.

Biden has tried to refocus the apparatus of the federal government and of global alliances like NATO toward standing up to Beijing, even as European diplomats often express polite bewilderment at the growing U.S. focus on its rivalry with China. Many European nations have taken Chinese infrastructure investment through its “Belt and Road Initiative,” and successive U.S. administrations have struggled to prevent China’s Huawei from controlling the backbone of emerging 5G infrastructure.

At the G-20, Biden will again try to sell the world on his “Build Back Better World” agenda, an effort by advanced democracies to offer developing nations an alternative to the Chinese infrastructure initiative, which the U.S. argues often comes with onerous and even coercive strings attached. He’ll also press American allies to meet their global vaccine donation commitments more swiftly, as the U.S. has warily watched China deploy a COVID-19 “vaccine diplomacy” strategy.

The U.S. has made a priority of engaging with its “Quad” partners — India, Japan and Australia — as Biden tries to get allies to speak with a more unified voice on China. And cleaning up a geopolitical row with France over a plan by the U.S. and U.K. to supply Australia with nuclear-powered submarines to better respond to the China threat is at the top of Biden’s diplomatic agenda this coming week.

At Biden’s direction, the U.S. intelligence community has launched a series of investigations focusing on Beijing. Officials have in the last several months publicly accused China of abetting cyber intrusions, considering efforts to interfere in American elections, and withholding critical information about the COVID-19 pandemic. Those allegations have elicited angry denunciations from Beijing, which has responded at times by pointing to previous U.S. intelligence failures.

Speaking to students at Stanford University last week, CIA Director William Burns labeled China the “single biggest geopolitical challenge” the U.S. faces.

“Competition with China for the United States spreads across virtually every domain there is,” he said.

On the military front, the newest source of U.S. concern is a recent hypersonic weapon test by China that Gen. Mark Milley, chairman of the Joint Chiefs of Staff, said was close to a “Sputnik moment,” referring to the 1957 launch by the Soviet Union of the world’s first satellite in space, which caught the world by surprise and fed fears that the United States had fallen behind technologically.

The Chinese government has disputed Western news reports about the test, saying it was working on a re-useable spacecraft, not a missile.

While some see the emergence of a new Cold War, it’s in many ways more complicated than the decades-long Soviet showdown.

The U.S. and China have arrived at this moment as both rivals and co-dependents. The U.S. needs cooperation with China to combat climate change and curtail Iran’s nuclear ambitions, and the two economies are closely entwined despite the Trump-era tariffs that Biden has kept in place.

Beijing, for its part, seeks not just a rollback of the protectionist measures, but for the U.S. to accept China’s rise as a geopolitical equal with its own sphere of influence. They’ve found some striking continuity between Biden and his predecessor, Donald Trump, who, in different ways, intensely sought to push back on Chinese aims.

The U.S. relationship with China “may be the question of our generation,” said Matthew Goodman, senior vice president for economics at the Center for Strategic and International Studies. Biden needs to preserve a durable relationship with China to deal with existential issues such as climate change, even as the status of Taiwan, cyber attacks and efforts to bring back factory jobs that moved abroad suggest the two nations are also pulling apart.

The two countries will need to find a path forward for the global community after the coronavirus pandemic.

Members of the G-20 spent a combined $15 trillion to slog through the economic shutdowns caused by the disease, creating high levels of debt that could become problematic should the Federal Reserve tighten its monetary policy and interest rates climb from their relative lows.

Census figures show that Americans are on track this year to import $470 billion worth of Chinese goods, the highest total since 2018, when Trump began to impose the new tariffs. Trade has kept the two countries linked, reliant on each other for growth despite the mutual tensions.

Where Trump largely went it alone on China, Biden sees the twin summits of the next week as a chance to bolster what he hopes will be a Western coalition against China.

Sullivan says China needs to understand that “the United States has an affirmative economic agenda for macroeconomic stability in the world, that there are certain steps we’re going to take to protect our workers and our businesses.”

From there, he says, the administration is waiting to see “what the Chinese government is prepared to step up and do.”

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