Broad U.S.-China Dialogue Advances Toward Goals

Broad U.S.-China Dialogue Advances Toward Long-Term Goals

A comprehensive economic dialogue has helped the United States and China broaden their perspectives on bilateral relations and deepen their understanding of each other's concerns, according to U.S. experts.

The U.S.-China Strategic Economic Dialogue (SED) was launched in 2006 by President Bush and China's President Hu Jintao to deal with the complexity of the U.S.-China economic relationship. The SED is conducted through twice-a-year, Cabinet-level meetings and follow-up engagement.

"There is no question the dialogue has provided a mechanism for much more serious, high-level consideration of big issues than ever before," Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics, told USINFO.

Treasury Secretary Henry Paulson said the SED has made "substantial" progress in building trust between the two sides and creating work plans to achieve shared objectives. Paulson will head the U.S. delegation to the SED's third session, which will take place in Beijing December 12-13. The meeting will focus on trade and product safety, balanced economic development, energy efficiency and security, environmental sustainability and bilateral investment.

In December 5 remarks to the Asia Society, Paulson said the two countries have strengthened economic ties and established channels of communication that did not exist previously.

"These innovations have helped keep the U.S.-China economic relationship on an even keel and helped us manage difficult issues, even in times of tension," he said.

One such issue that has received much attention in the U.S. media is the safety of food and toy imports from China.

U.S. Treasury Special Envoy for China and the SED Alan Holmer said that U.S. agencies used the momentum created by the dialogue to reach bilateral agreements on import safety, civil aviation, financial services and other issues.

But Albert Keidel, a senior associate at the Carnegie Endowment for International Peace, said the SED is not the best platform for "headline" issues. The dialogue should remain focused on long-term objectives, he told USINFO. More immediate issues could be handled through direct "technical" contacts between specialized ministries or the World Trade Organization dispute-settlement process, he said.

U.S. officials say the underlying purpose of the dialogue is to broaden often narrow views of specialized government departments by bringing their chiefs together.

The SED "breaks down classic bureaucratic stovepipes [obstacles] that hinder effective communication and impede results," Holmer said.

Lardy shares this view. He said the dialogue has been a mechanism that has forced officials on both sides to take into account the "bigger picture."

As such, it can accomplish "quite a bit" in the long run, Lardy said.

Keeping the dialogue's focus on strategic objectives will be challenging because the administration has had a hard time controlling Congress' and U.S. manufacturers' expectations of more immediate results, he said.

Both experts say the next year can be crucial in this respect because of the 2008 elections in the United States and changes in the Chinese leadership.

Keidel said pressure from Congress and presidential candidates on the Bush administration to produce immediate results, particularly on the Chinese currency exchange rate and U.S. trade deficit with China, will rise. A few senators recently renewed attempts to pass punitive measures against China if it fails to make its currency more flexible.

On the Chinese side, Vice Premier Wu Yi, who has headed the Chinese delegation to the SED, announced she would retire in the spring of 2008.

Paulson said that he will work well with whomever her replacement may be. He said that the progress made through the SED points the way to further benefits for the American and Chinese people.

"To turn back on, or away from, this road would jeopardize our long-term strategic interests for short-term political expediency," Paulson said.

ENDS

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