Xi, Kerry Start U.S.-China Talks Looking Past Current Tensions

Wednesday, 09 Jul 2014 06:13 AM


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Chinese and U.S. officials meeting for annual bilateral talks began today’s session with assurances that the world’s two biggest economies have areas of mutual interest, seeking to look past increasing diplomatic tensions.

Relations must be viewed in the “long term” so the world’s two largest economies can keep moving in the same direction, Chinese President Xi Jinping said today at the opening of the sixth U.S.-China Strategic and Economic Dialogue at the Diaoyutai State Guesthouse in Beijing.

Secretary of State John Kerry, who is joined by Treasury Secretary Jacob J. Lew and other senior U.S. officials, spoke of his Shanghai-born grandfather to highlight historic links between the U.S. and China. Kerry added that differences over individual issues must not be interpreted as an “overall U.S. strategy” because “the U.S. does not seek to contain China.”

Such public pledges contrast with signs of increasing wariness of each other’s strategic intentions and tactics. China in November declared an air-defense identification zone over disputed areas and the U.S. in May indicted five Chinese military officers for computer theft of trade secrets.

China is concerned that the Obama administration’s foreign- policy rebalancing, or “pivot” to Asia, is aimed at thwarting China’s growing influence in the region. It canceled cybersecurity talks due this week and has criticized the U.S. of being biased toward its regional allies Japan and the Philippines against China on maritime disputes in the South and East China seas.

Climate Issues

The agenda for the dialogue includes regional disputes as well as climate and energy issues, two Obama administration officials who asked not to be identified said in a briefing before the talks. Lew said today that greater exchange-rate flexibility in China would help raise household purchasing power and that opening the economy to more foreign investment is also important to boost productivity growth.

This week’s talks come “at a critical moment,” said Sun Zhe, director of the Center for U.S.-China Relations at Tsinghua University in Beijing.

“China saw a strengthening of the U.S.-Japanese alliance in the past few months and was deeply upset about the formal indictment of five military officers over cyber-espionage, and this was just the top of a long laundry list,” Sun said. “There have been no obvious bright spots in cooperation between the world’s No. 1 and No. 2 economies, which both sides find unacceptable.”

The countries “understand that the sheer breadth and depth of economic ties calls for a multi-dimensional relationship that can tightly manage frictions and skillfully handle disagreements,” Sun said.

Mutual Respect

A conflict between China and the U.S. would be “a disaster for the two countries and the world,” Xi said today. “As long as we uphold mutual respect, maintain strategic patience and remain unperturbed by individual incidents and comments, we’ll be able to keep relations on a firm footing despite ups and downs that may come our way.”

China’s deployment of an oil rig off the Vietnamese coast has added to tensions.

“Let me emphasize to you today: the U.S. does not seek to contain China,” Kerry said. “I can tell you that we are determined to choose the path of peace and prosperity and cooperation, and yes, even competition but not conflict.”

© Copyright 2014 Bloomberg News. All rights reserved.

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