As a rising power, China seeks to expand the influence of its economy. And the US wants to profit more from its economic activities with China.
The second round of Sino-US Strategic Economic Dialogue took place in Washington DC on May 23 and 24, 2007. Chief representatives from both sides were high-leveled officials, which proved the importance of the talk. The U.S. delegation consisted of officials from 11 Cabinet-level agencies and Federal Reserve Chairman Ben Bernanke. The China delegation led by Chinese Vice Premier Wu Yi included 14 ministers and the head of China's central bank Zhou Xiaochuan. Key issues of mutual concerns like trade balance, currency exchange rate, energy security and pace of development were discussed in the dialogue.
Developing bilateral economic activities yet many disputes
The success of China's economy in recent years encourages economic relations between China and the U.S. China is the fourth largest trading partner of the U.S. while the U.S. is the second largest trading partner of China. American enterprises have been enthusiastic to invest in China and recently China has made a large investment in U.S. firm. There is optimism about cooperation between the two countries in energy security and environment protection.
However, many disputes that cause tensions in Sino-US economic relations exist. China wants the U.S. to lift restrictions in high-tech exports to China which have been established for fear that those items will be used for military purposes. China is also not pleased with what it considers the U.S.'s economic protectionism and the pressure to revalue its currency from the U.S. For its part, the U.S. is impatient with the current pace of economic reform and the inefficiency of intellectual property rights protection in China. The U.S. has not accepted that China's economy is market economy, which China strongly opposes.
The second round of Sino-US strategic economic dialogue,
High-level economic dialogues have been the favoured way to handle problems. The first round of the strategic economic dialogue between the U.S. and China was held in Beijing in December 2006 and two sides have agreed to have another round in December 2007. It is expected that through the dialogues, both sides will understand each other's dispositions thus they can join efforts to address the issues and reach closer cooperation.
In the second Sino-US strategic economic dialogue, China and the U.S. have reached agreement over issues like financial services, energy and environment, civil aviation and technology. China agreed to lift the quota for foreign institutional investors from 10 billion USD to 30 billion USD. The U.S.'s air cargo companies will have virtually unlimited access to China and it is predicted that the number of daily round trip flights between two countries will increase from 10 to 23 by 2012. On the other hand, the U.S. will help China in methane exploitation projects and the building of a low sulfur fuel policy. The two countries will cooperate in the evaluation of different approaches to energy saving and emissions control.
However, as can be foreseen, the biggest problems cannot be solved in two days’ talk. China and the U.S. did not reach any specific agreement about disputes in trading between the two countries, China’s currency policy and Intellectual Rights Protection in China. Development in those issues is hoped to be made at the third round of strategic economic dialogue in Beijing in December 2007.
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