China seems to be ignoring persistent overtures by the American government. Or possibly not?

«Hao mianzi», a Mandarin term roughly equivalent to an adroit saving of face in English, is something exceedingly difficult, even impossible, for those working in China to get just right – particularly those who do not have an ancestral connection to the mainland. 

Even though a «China Daily» opinion piece from 2022 maintains that it has become increasingly less relevant for the country’s young white-collar workers, it apparently remains alive and well regarding the diplomatic relationship between the US and China.

Yellen Speaks

For example, when the American Treasury Secretary Janet Yellen held a speech late last week at the US-China Business Council’s 50th anniversary dinner, she seemed to telegraph a reset.

Although many of her comments repeated past statements about not wanting to decouple and remained firm on sanctions and human rights, the crux of what she was saying was that the US intended to put everything on a steadier track next year, when she plans to take a second trip to China.

Responsible Management

«Continuing to stabilize our relationship to prevent escalation won’t make news. But our economies, our people – and, again, also economies and people around the world – will be safer and more secure. This is what it means for the US and China to build and responsibly manage our relationship,» Yellen indicated.

The problem with that? There appeared to be no direct reaction from Chinese public sources such as «Xinhua», the country’s national news agency, unlike in November when her comments at the end of the conclusion of the APEC finance minister meeting in San Francisco were disseminated widely.

No Cause for Concern

But we might simply be seeing a dollop of Hao Mianzi. Lest we forget it is less than a year and a half since the then Speaker of the House Nancy Pelosi visited Taiwan, and light amphibious tanks were seen rolling past beaches in Xiamen in Fujian, a Chinese city directly facing the island at its closest point.

Given that, it is unlikely that «Xinhua» is going to be fawning over every comment coming out of the US government, no matter how friendly. 

Anniversaries Galore

Still, something seems to be percolating in the background and it seems more positive than negative. The news agency’s North America site seems to have a very high affability quotient, given that it seems veritably peppered with positive stories about the US, including a piece published Wednesday commemorating the 52ndanniversary of so-called «Ping-Pong» diplomacy, with celebrations held in Washington, San Francisco, and Los Angeles.

The location (Washington) and the anniversary seemed auspicious, almost paralleling the business function Yellen attended late last week.

Financial Industry Implications

If some of that proves true, the financial industry and banks should probably pay close heed to a few of the encouraging developments Yellen served up in her speech, in particular the fact that the US and China will «facilitate» exchanges between regulators, as it already does with the EU and the UK.

«We already have efforts underway to exchange information about modeling climate stress scenarios, which is crucial to understanding and preparing ourselves for the threat climate change poses to our financial systems. And we are facilitating a similar technical exchange on how each jurisdiction handles – and how we’d best coordinate – if there were a failure of a global systemically important bank, or G-SIB, in the U.S. or China,» she indicated.

Clutching at Straws

This may all be clutching at straws. Right now, it remains unclear as to what is a coincidence and what is not. But taking such a tiptoed approach also allows both sides to retrench to previous positions, should it be warranted, without losing much of that all-important face and honor.

Still, if there is a reset going on behind the scenes, and the US and China are intentionally ratcheting down the signal-to-noise ratio while looking to become long-term best frenemies supposedly forever –that may not be a bad thing.