China resets on multiple fronts

If China’s reversal of its tight Covid-19 policies was not enough of a surprise, coming as it did with attendant risks that include high mortality rates as a trade-off to build herd immunity, President Xi Jinping’s top man on the economy has used the Davos platform to reassure the Western capitalist world that far from staying a centrally planned economy, China is determined to stay open to the world – not out of expediency, but as a core belief. The message from the Harvard-educated Vice-Premier, Mr Liu He, will be heard around the world. Big Chinese technology firms such as Alibaba will take heart that the two-year crackdown on some of them is abating, if not ebbing.

Just as important as his speech to the World Economic Forum, Mr Liu’s itinerary in Switzerland included a three-hour meeting with United States Treasury Secretary Janet Yellen. It appears that the meeting was constructive because Dr Yellen is now expected to visit Beijing after Secretary of State Antony Blinken travels there on Feb 5 for two days of wide-ranging discussions. Treasury was the last of the three key arms of US government – State and Defence being the other two – to move to an adversarial view of China, and it makes eminent sense to have its chief steward pay a visit to Beijing to smoothen out some of the wrinkles that bedevil Sino-US ties. Clearly, Mr Xi’s November meeting with President Joe Biden at the Group of 20 summit in Bali had not been in vain.