China says S&ED meeting opportunity for new relationship

July 9, 2013 at 1:10 AM
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WASHINGTON, July 9 (UPI) -- China is expecting the fifth Strategic and Economic Dialogue with the United States to become the basis for "a new type of major-country relationship."

While a number of issues including cybersecurity, military relationships, North Korea and trade will likely occupy the two sides during their high-level meeting in Washington from Wednesday, China's official Xinhua News Agency in a commentary noted the S&ED "will serve as the first major step to implement the bilateral consensus on building a new type of major-country relationship."

The S&ED process between the world's two largest economies was begun five years ago. This year's event, which Washington will host, comes on the heels of the June summit in California between U.S. President Barack Obama and China's new and reform-minded leader Xi Jinping.

The Chinese side at the meeting will be led by Vice Premier Wang Yang and State Councilor Yang Jiechi, while Secretary of State John Kerry and Treasury Secretary Jack Lew will head the U.S. team.

The Xinhua article said at the California summit, termed as having ushered in "a new chapter of trans-Pacific cooperation," both Obama and Xi pledged they would seek to build a new model of relationship based on coordination and cooperation instead of rivalry and confrontation.

However, there are contentious and difficult issues to deal with including cyber security, bilateral trade and China's undervalued currency, U.S. rebalancing toward Asia-Pacific, and North Korea and its nuclear threat.

In a discussion ahead of the Washington meeting, Brookings institution on its web site quoted its scholar Kenneth Lieberthal that the United States is trying to draw a bright red line in the cyber arena.

"Effectively, the U.S. position is everyone conducts espionage; we don't object to Chinese espionage, they should not object to ours. But, the U.S. does not do commercial espionage to benefit our own firms competitive position, the Chinese side does and we insist that they stop."

But Xinhua went on to say the "recent controversy over Edward Snowden, the whistleblower who exposed the U.S. wide-ranging global surveillance and cyber spying operations, has complicated the situation to some extent." The episode offers an opportunity for the two sides to start serious discussions to create rules in the cyberspace, it added.

On North Korea, Lieberthal said under its current position, China accords equal weight to denuclearization of North Korea and stability of that country. "We of course want them to have denuclearization first and foremost. I don't think they are there yet and I think it's going to be hard to move them beyond their current position."

On U.S.-China trade, fellow Brookings Scholar Eswar Prasad said Washington will continue pushing for better access of U.S. corporations and financial institutions to China's markets, and for better intellectual property protection.

"China, for its part, will be eager to get more clarity from the U.S. government about Chinese firms access to investment opportunities in the U.S. as well as U.S. technology," Prasad said.

Xinhua said the new S&ED is also necessitated by the urgency to deal with differences and tackle shared challenges.

"While endeavoring to shift the gear of economic development so as to sustain its growth, China is facing daunting challenges including shortage of resources, worsening pollution and uneven development among regions," it said.

"The U.S. economy is still reeling from the worst economic slowdown since the 1930s, as its recovery is far from steady and sufficient. It also faces major challenges such as spiraling fiscal deficit, ongoing sequestration and lingering high unemployment."

The article said "deepening economic cooperation and increasing bilateral trade and investment" will benefit not only both countries, but also the global economy as a whole.

The article said as the United States continues to carry out its rebalancing policy in the Asia-Pacific region "by increasing its military presence and involvement in regional territorial disputes," the two sides need to further promote mutual trust through dialogues and military-to-military exchanges.

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