U.S.-China Trade

When: June 17 and 18

Where: US Naval Academy - Annapolis, MD

Who: Co-Chairs US Treasury Secretary Henry M. Paulson, Jr. and Vice Premier Wang Qishan

Why: To strengthen and deepen the bilateral economic relationship through actions to:

• raise questions
• seek consensus
• implement results
• prevent trade protectionism and conservatism from hampering the trade cooperation

What: An overview of China and the US coming to the table to discuss the following areas:

1. Macroeconomic Cooperation and Financial Services.  The countries pledge to work together toward sustained growth, stability in price and financial systems, and agreed to continue a collaborative approach to sharing information on issues of mutual interest.
2. Investment in people and Product Quality and Food Safety. Agreed the need to open up communication regardingt mitigating economic risks associated with aging populations in both countries, and to use this as a platform for investigating ways to provide better healthcare and retirement services. Bilateral efforts to continue activities determined at SED III for product safety on an ongoing basis.
3. Cooperation on Energy and the Environment. Mutual understanding of the importance of cooperating to address challenges. Both countries expressed the desire to strengthen commitments to energy and the environment.
4. Trade and Competitiveness. Challenges of trade were discussed, as well as actions that would support each nation’s economy within the larger picture of globalization.
5. Investment. China and US came to an agreement on a series of actions that will be taken to create a mutually beneficial investment path for and between both.

January 17 and 18, China and the US held the third round of the Strategic Economic Dialogue in Beijing. 

 The SED is a cabinet-level series of summits began by President Hu Jin Tao and President George W. Bush in August, 2006 to address and smooth over Sino-American disputes such as those surrounding product safety and climate change.

The mid-January two-day dialogue was co-chaired by Chinese Vice Foreign Minister, Dai Bingguo and U.S. Deputy Secretary of State, John Negroponte. Though scheduled to exchange dialogue on steady-state matters such as ensuring the longevity of US-China relations through trade, the timing of this SED round served as a convenient platform to address one front-burning issue gaining steadfast momentum: Cross-Strait relations.

On the heels of Taiwan’s parliamentary elections (held January 12), many saw this event as an opportunity for Beijing to dually:

1) Re-iterate to US the need to restrain Taiwan’s calls for independence. 
2) Send the message to Taiwan that US-China ties are being strengthenedDespite analyses that Beijing has accelerated activities (below) to alienate Taiwan prior to its elections, it seems China’s efforts will ultimately have little impact over the election, as the Taiwanese seem to be voting toward domestic, economic, and social issues — and reportedly see little difference between the DPP and KMT, China’s preferred opposition.

China’s ”activities” :

• Playing its contacts (foreign government officials, business leaders, academics, researchers) to 
  China’s expectation that Taiwanese President Chen Shui-bian will leverage the election to declare independence with the 2008 Olympics in sight. (China is described as stating it would have “no choice but to respond to preserve the territorial integrity of China,” compelling several governments to express concern and back-up the bid to preserve the Cross-Strait status quo.)
• Wooing Taiwan’s remaining diplomatic allies. (With Malawi as an addition, it was reported Taiwan’s foreign minister was left sitting in South Africa after having his visa denied without prior warning)
• Blossoming ties with the Marshall Islands, and Japan. (Oil and gas can buy friends)
• And now, SED III. (Strategically-placed maraschino cherry)

Conclusion (SED III). Negroponte was swift to jump on the wagon, firmly backing One-China, citing the UN membership referendum  . . .  the two sides agreed to look forward to common interest and strengthened cooperation at the Beijing Olympic Games, tra la la.) SED IV will take place later this year, on US soil. We’ll likely be seeing much more on The Motherload, Cross-Strait.

Standby!