In an effort to address expected challenges to U.S.-China relations under President-elect Donald Trump, Chinese Vice Premier He Lifeng recently met with several top U.S. financial executives. These meetings come as Beijing prepares for the possible imposition of tariffs on Chinese goods, a key part of Trump's campaign rhetoric.
He Lifeng, one of China's four vice premiers and a leading figure in the country's economic and financial policy, has actively sought to establish connections with influential players in American financial circles. In the past month, he had talks with Larry Fink, chief executive of BlackRock, on December 5, and John E. Waldron, chairman of Goldman Sachs, on December 4. These meetings followed an earlier engagement with Citigroup CEO Jane Fraser on November 21. as reported by Chinese state media.
Peter Alexander, founder of Shanghai-based consultancy Z-Ben Advisors, noted that these meetings reflect China's strategic approach to diplomacy. “The Chinese are exploring every possible path to reach those who will come to power in Washington under the Trump administration,” Alexander said. “Backchannel communications are a preferred strategy for China when establishing lines of dialogue.”
Among the financial firms involved, Goldman Sachs acknowledged the reports, while Citigroup and BlackRock declined to comment when contacted by CNBC.
Wall Street's role in shaping US-China trade policy
As Trump assembles his administration, which is expected to include at least 10 billionaires, several appointees have extensive finance experience. Notable figures include Scott Bessent, a hedge fund manager appointed as Treasury Secretary, and Howard Lutnick, CEO of Cantor Fitzgerald, who is expected to play a role in trade policy.
Clark Packard, a senior fellow at the Cato Institute, believes Wall Street insiders within the administration could temper some of the more aggressive trade measures favored by Trump. “I think Wall Street voices in Treasury and other departments will act as a moderating influence on protectionist trade policies,” Packard said. “While there will likely be some protectionist elements, these individuals may work to curb more extreme actions.”
Packard also highlighted concerns about potential market reactions to aggressive trade policies. “Treasury officials are particularly aware of how markets might respond,” he said. “The only factor that could dissuade Trump from pursuing hard-line policies is a negative reaction from the financial markets.”
Economic uncertainty and China's preparations
As U.S. markets move toward a rare second consecutive year of gains above 20%, Chinese financial markets have also shown resilience. After a difficult start to the year, Chinese stocks have rebounded following Beijing's announcement of economic stimulus measures in late September, which were reaffirmed at a high-level meeting earlier this week.
China's recent engagement with Wall Street executives is part of a broader strategy to prepare for potential economic turmoil. Zongyuan Zoe Liu, a senior fellow at the Council on Foreign Relations, described Beijing's actions as a way to keep its “options open.”
“By hosting Wall Street leaders and implementing policies such as export controls on critical minerals, China is preparing for worst-case scenarios,” Liu said. However, he warned that financial institutions alone were unlikely to significantly influence tensions between the United States and China. “Wall Street executives prioritize business opportunities and are unlikely to abandon markets that align with their interests,” he added.
Chinese state media framed He Lifeng's meetings as an indication of Beijing's desire to further open its financial sector and attract long-term foreign investment. State media often portray foreign capital inflows as a vote of confidence in China's domestic market.
Strengthening financial ties in a context of growing tensions
In addition to meetings with Fink, Waldron and Fraser, He Lifeng also met with Andrew Schlossberg, CEO of Invesco, on November 12, and Mark Tucker, chairman of HSBC Group, on November 14. Both meetings were reported by Chinese state media. While HSBC said it had no further comment, Invesco did not respond to requests for clarification.
For years, capital markets have been one of the most interconnected aspects of U.S.-China relations, according to Winston Ma, an adjunct professor at NYU School of Law. But he noted that these financial connections have often acted as a stabilizing force in bilateral relations.
“When cross-border financial ties are constructive and cooperative, they can lead to mutual prosperity,” Ma said. “However, if the relationship becomes adversarial, it risks mutual assured destruction, just like the Cold War principle of deterrence.”
Beijing's calculated approach
China's involvement with Wall Street reflects a broader effort to mitigate the potential fallout from Trump's trade policies. By fostering relationships with influential financial leaders, Beijing hopes to maintain a degree of stability in its economic ties with the United States.
At the same time, China signals its willingness to adapt to whatever challenges may arise. From implementing domestic economic stimulus measures to exploring alternative export markets, Beijing appears determined to resist any disruption to its trade relations with the United States
While the meetings with financial executives underline China's commitment to maintaining an open dialogue, it is unclear how much influence these interactions will have on the Trump administration's approach to trade and economic policy.
A critical moment for US-China relations
As Trump prepares to take office, the future of US-China relations hangs in the balance. With trade tensions looming, both countries face a complex landscape of economic and political uncertainty.
For China, dialogue with Wall Street leaders represents a pragmatic effort to safeguard its economic interests. For the United States, the involvement of financially savvy individuals in the Trump administration could play a critical role in shaping the direction of trade policy.
Ultimately, the coming months will reveal whether these backchannel communications and strategic commitments can help ease tensions or whether the relationship between the world's two largest economies will face further strains. For now, Beijing is keeping its options open as it prepares for a potentially turbulent period.
