Has surprising US economic growth strengthened Washington’s hand in China negotiations?

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But Liang Yan, professor and chair of economics at Willamette University in the US state of Oregon, said negotiations have little to do with economic strength, including interest rate differentials, capital outflows and trade.

“With lower inflation, it’s even more unlikely that they’re going to ratchet down on their tariff rates,” she added.

“It’s really politics that drive these negotiations.”

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Alfredo Montufar-Helu, head of the China Centre for Economics and Business at The Conference Board, said that the US is concerned with improving market access and China’s business environment for US firms; addressing unfair trade practices such as state subsidies; and reducing the trade deficit.

China is, he added, interested in reducing trade sanctions, preventing further tightening of tech restriction and removing Chinese entities from the US blacklist.

“Beijing does not want to reinforce or bolster the already deeply entrenched market scepticism and antipathy towards it, as it seeks to steer the country towards a steady recovery,” said Brian Wong, a fellow with the University of Hong Kong’s Centre on Contemporary China and the World.

“[And US President Joe] Biden has every reason to want to avoid getting embroiled in further military-kinetic conflicts, given the wars in Gaza and Ukraine.”

Yellen is expected to return to China this year, but her involvement may not bear fruit, analysts said, as both countries tend to preserve the status quo in their relations during an election year.

“Yellen has been marginalised in the Biden administration for a long time … she can’t add concrete value to the bilateral relationship,” said Lu Xiang, an expert on US-China relations at the Chinese Academy of Social Sciences, with the US presidential election set to take place in November.

“Now, as the current [US] government enters ‘garbage time’, it’s even harder to expect her to play a significant role.”

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“The two sides should strengthen dialogue and communication, striving to assist businesses in addressing a variety of challenges they face in practical economic and trade cooperation, and to tap into the potential of such collaboration,” Wang said.

American companies have expressed “their greatest concern” about the US-China relationship, and the risk of business issues is becoming politicised, he added.

“We are earnestly committed to addressing the problems that enterprises need to be solved,” he added.

Lu at the Chinese Academy of Social Sciences added that China’s economic growth is not lagging compared with other key world economies, and that a moderately high rate would likely be the “new normal”.

“China’s economic struggles could dent global growth, but the US … is unlikely to be massively affected,” said Neil Thomas, a fellow for Chinese politics at the Asia Society.

Last year, amid ongoing decoupling, China’s exports to the US fell by 8.1 per cent, year on year, but Han Shen Lin, a finance professor at New York University Shanghai, raised the possibility of “a worrisome scenario”.

“[Lagging] consumption will force China to pivot to excessive exports to trade its way to economic growth,” he said.

“Any flood of Chinese goods into the US will certainly trigger protectionist reactions in this sensitive US-election period.”