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China, US dialogue 'key' to future ties

0 CommentsPrint E-mail China Daily, April 28, 2010
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China and the United States will hold in Beijing in late May the second round of Strategic and Economic Dialogue (SAED), which analysts consider the "key" to determining the future of possibly the most important bilateral relationship in the world.

They say trade relations, the Iran nuclear issue and the value of the Chinese currency are likely to top the meeting agenda in the capital.

US Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton will lead the US side in meetings co-chaired by Chinese State Councilor Dai Bingguo and Vice-Premier Wang Qishan. The two-day talks are set to start on May 24, news agency Reuters reported on Monday.

Established by President Hu Jintao and US President Barack Obama last April when they met in London, the first SAED was held three months later in Washington. The dialogue is also an upgraded mechanism to replace the former Strategic Economic Dialogue in 2006 started under the George W. Bush administration.

The new version has both a "Strategic Track" and an "Economic Track". Clinton and Dai co-chair the "Strategic Track". Geithner and Wang co-chair the "Economic Track".

"Sino-US relations are now at a turning point and the meeting is key for both parties to determine their future strategies. The discussion will include more topics than in 2009," said Yuan Peng, head of US studies at the China Institutes of Contemporary International Relations.

Yuan said Beijing would focus on trade protectionism and China's core interests while Washington will spotlight sanctions on Iran and the Chinese currency.

Besides, Internet freedom since Google's pullout announcement in March and China's investment environment will also be touched upon.

"Some think that bilateral relations are warming at the surface, but underneath, the gap has just begun to widen," he said.

"Relations have been strained since last December and the US is to blame for that," said Shi Yinhong, an expert on American studies at the Renmin University, citing weapons sales to Taiwan and Obama's meeting with the Dalai Lama.

"(But) the upcoming dialogue is the hard-earned result of mutual efforts," Shi said, adding the two countries would try to avoid escalating existing problems.

Reuters quoted Geithner last week as saying that he thought Beijing would eventually find it is in its own interest to allow more currency flexibility.

A complaint widely heard in the US Congress is that China's exports at the current currency rate have stolen American manufacturing jobs. But, China will not let other countries dictate whether the yuan should appreciate or not, Yuan said.

"There is not a unified voice. Other international players, such as Japan and other European countries are not with the US on this one (issue), and unlike what the US has claimed, the yuan is not the reason for America's unemployment (problem)."

The expert said small and medium enterprises in the US, due to less governmental help, were chiefly to blame for the unemployment problem.

Experts tracking the issue predict that bilateral relations will be more pragmatic in future as both sides now have a different perception of each other.

"The US now thinks that China is not as humble as they assumed. With growing capability and confidence, Beijing is projected by Washington as outright ambitious. Meanwhile, China has learnt to lower its expectations of the Obama administration, because the US involvement with Taiwan and Tibet has taught Beijing that the new president's policy is not significantly different from previous ones," Yuan said.

"But it's a good thing that we now understand each other better, so we can be more practical in the future."

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