More than ‘greet’ and ‘meet’

De­spite ten­sions over is­sues such as the South China Sea and cy­ber se­cu­rity, next week China and the United States will hold their largest an­nual bi­lat­eral meet­ings to ex­pand co­op­er­a­tion and bet­ter man­age dif­fer­ences, Chen Weihua re­ports from Washington.

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Their ab­bre­vi­a­tions are S&ED and CPE. To some observers of US-China re­la­tions, what they rep­re­sent are sim­ply an­nual “meet and greet op­por­tu­ni­ties’’.

But when they start next week in Washington, the ses­sions of the China-US Strate­gic and Eco­nomic Di­a­logue (S&ED) and the Chi­naUS High-Level Con­sul­ta­tion on Peo­ple-to-Peo­ple Ex­change (CPE) will take on added im­por­tance as a pre­lude to Chi­nese Pres­i­dent Xi Jin­ping’s meet­ing at the White House with Pres­i­dent Barack Obama in Septem­ber.

Vice-Premier Liu Yan­dong, China’s high­est-rank­ing fe­male in the gov­ern­ment, will lead her coun­try’s CPE del­e­ga­tion to the meet­ings by first spend­ing three days en­gag­ing with Amer­i­cans. She will be in Pittsburgh on Fri­day and then go to Hous­ton, be­fore head­ing to Washington for the largest an­nual bi­lat­eral meet­ings be­tween the two gov­ern­ments.

In Pittsburgh, Liu is sched­uled to meet In­tel Corp CEO Brian Krzanich. The semi­con­duc­tor chip maker has a ma­jor re­search fa­cil­ity in Pittsburgh and one in China. Liu and Krzanich had met in Bei­jing in Oc­to­ber 2013.

She will at­tend an event mark­ing the 10th “Chun­hui Cup” Chi­nese Over­seas Stu­dents In­no­va­tion and Entrepreneurship Com­pe­ti­tion, and meet Mayor Wil­liam Pe­duto at city hall be­fore go­ing to the Univer­sity of Pittsburgh for a meet­ing with Chan­cel­lor Pa­trick Gal­lagher and a tour of the school’s Con­fu­cius In­sti­tute and med­i­cal school, where a group of Ts­inghua Univer­sity stu­dents is study­ing.

More than 270,000 Chi­nese stu­dents at­tend US univer­si­ties and col­leges, ac­cord­ing to the In­sti­tute of In­ter­na­tional Ed­u­ca­tion. In the fall of 2013, the Univer­sity of Pittsburgh ad­mit­ted 1,560 stu­dents from the Chi­nese main­land, com­pared with 123 from South Korea, 99 from Tai­wan, and 95 from Saudi Ara­bia. A year ago, the Univer­sity of Pittsburgh and Sichuan Univer­sity launched a joint ven­ture, Sichuan Univer­sity Pittsburgh In­sti­tute in Chengdu in South­west China.

Liu will then travel to Hous­ton for the week­end and an ar­ray of cul­tural, sports, ed­u­ca­tion and public health events.

On Tues­day, Liu, along with VicePremier Wang Yang and State Coun­cilor Yang Jiechi, join US Sec­re­tary of State John Kerry and Trea­sury Sec­re­tary Jack Lew for what will be the sev­enth round of the S&ED and the sixth CPE. Kerry re­turned to Washington on Tues­day af­ter surgery on his bro­ken fe­mur caused by a bik­ing ac­ci­dent in France weeks ago. It is likely that he will ar­rive on crutches. A med­ley

Un­like the CPE, which por­trays largely a rosy pic­ture of co­op­er­a­tion and ex­change, the S&ED is more like a med­ley of co­op­er­a­tion, com­pe­ti­tion and some­times con­fronta­tion.

Pro­duc­ing the big­gest head­lines be­tween the two coun­tries lately are lin­ger­ing rows over mar­itime ter­ri­to­rial dis­putes in the South China Sea, cy­ber se­cu­rity, the US re­bal­ance to Asia strat­egy, US mil­i­tary sur­veil­lance close to Chi­nese shores, arms sales to Tai­wan, US re­stric­tions of high-tech ex­ports to China and in­tel­lec­tual prop­erty rights.

Robert Daly, di­rec­tor of the Kissinger In­sti­tute on China and the United States at the Wil­son Cen­ter, said the at­mo­spher­ics go­ing into this year’s S&ED are “as bad as they’ve ever been”, but he noted that both sides will likely use the S&ED to sig­nal de­ter­mi­na­tion to con­tinue co­op­er­at­ing with each other and will ac­cen­tu­ate the mu­tual ben­e­fits of en­gage­ment.

Dur­ing his visit last week to Washington, Cen­tral Mil­i­tary Com­mis­sion Vice-Chair­man Fan Chang­long de­scribed his trip as cre­at­ing a good at­mos­phere for the Septem­ber visit by Xi, and said both sides are likely to use S&ED to fur­ther pave the way for a suc­cess­ful meet­ing be­tween Xi and Obama.

And Nathan Sheets, the US un­der­sec­re­tary of the Trea­sury, said: “This year, the re­la­tion­ships and open com­mu­ni­ca­tion de­vel­oped in the S&ED will again play an im­por­tant role in paving the way for the meet­ing of our pres­i­dents.”

Cheng Li, di­rec­tor of the John L. Thorn­ton China Cen­ter at the Brook­ings In­sti­tu­tion, quoted Al­bert Ein­stein as say­ing in 1945 that “the re­lease of atomic power has changed ev­ery­thing ex­cept our way of think­ing.” He wrote on the Brook­ings web­site on Wed­nes­day that dur­ing the last 70 years, Ein­stein’s state­ment has of­ten re­minded us to be crit­i­cal of anachro­nis­tic worldviews in a pro­foundly chang­ing world.

On the eve of the S&ED and in ad­vance of Xi’s trip, Li said pol­i­cy­mak­ers in both coun­tries should be less pre­oc­cu­pied by con­tentious is­sues, and more inspired by Ein­stein’s call for a new way of think­ing, not­ing the ur­gent need for co­op­er­a­tion be­tween China and the US in an age of glob­al­iza­tion and the need to es­tab­lish in­ter­na­tional norms in cy­ber se­cu­rity. Mod­est goal

Ted Car­pen­ter, a se­nior fel­low for de­fense and for­eign pol­icy stud­ies at the Cato In­sti­tute, a Wash­ing­ton­based think tank, said this year’s talks should fo­cus on im­prov­ing bi­lat­eral com­mu­ni­ca­tion on key is­sues. “Such a mod­est goal is def­i­nitely achiev­able. It is not likely that the un­der­ly­ing sub­stan­tive is­sues can be re­solved quickly, since they are all rather com­plex, but mea­sur­able progress should be the goal,” he said.

Car­pen­ter be­lieves that US and Chi­nese of­fi­cials need to dis­cuss how to re­duce ten­sion over the South China Sea, es­pe­cially to pre­vent an in­ci­dent be­tween Chi­nese and US mil­i­tary forces op­er­at­ing in the area.

“The US side must also take greater steps to show that it is truly neu­tral re­gard­ing the sub­stance of the var­i­ous ter­ri­to­rial dis­putes in the South China Sea,” he said.

The Chi­nese be­lieve that the US is bi­ased against China in the mar­itime ter­ri­to­rial dis­putes in both the East and South China Seas to keep its pri­macy in the re­gion by ral­ly­ing al­lies and part­ners, in par­tic­u­lar Ja­pan, the Philip­pines and Viet­nam.

US of­fi­cials, from Obama to De­fense Sec­re­tary Ash Carter, have crit­i­cized China’s re­cent land recla­ma­tions in the South China Sea, but Chi­nese of­fi­cials, in­clud­ing Fan of the Cen­tral Mil­i­tary Com­mis­sion, have ar­gued that the con­struc­tion is be­ing done on China’s sov­er­eign ter­ri­tory and is mainly for civil­ian pur­pose such as dis­as­ter re­lief and nav­i­ga­tion. They have dis­missed the US con­cern by as­sur­ing that free­dom of nav­i­ga­tion will not be af­fected there for any na­tion.

China has been a late­comer in land recla­ma­tion in the South China Sea, some­thing that Chi­nese of­fi­cials said demon­strates China’s re­straint. US As­sis­tant Sec­re­tary of De­fense David Shear told a US Se­nate hear­ing in May that in the Nan­sha (Spratly) Is­lands, Viet­nam has 48 out­posts, the Philip­pines eight, China eight, Malaysia five and Tai­wan one. China ar­gued that some of these out­posts were built on islets and reefs that be­long to China.

On Tues­day, Lu Kang, the new for­eign min­istry spokesman who pre­vi­ously served as deputy chief of mis­sion at the Chi­nese em­bassy in Washington, in­di­cated that the land recla­ma­tion pro­ject on some sta­tioned is­lands and reefs in the Nan­sha Is­lands will be com­pleted in the com­ing days. No mis­cal­cu­la­tion

Dur­ing his visit to Washington last week, Fan urged the US to re­duce its mil­i­tary ac­tiv­i­ties in the air and wa­ters of the South China Sea. Many Chi­nese be­lieve that it was the US which em­bold­ened coun­tries such as the Philip­pines and Viet­nam to adopt a more con­fronta­tional stance in the mar­itime ter­ri­to­rial dis­putes there.

There has also been se­ri­ous con­cern on both sides about a pos­si­ble ac­ci­dent caused by misun­der­stand­ing and mis­cal­cu­la­tion when Chi­nese and US mil­i­taries op­er­ate in close prox­im­ity, es­pe­cially fol­low­ing the 2001 col­li­sion of the US EP-3 spy plane and a fighter jet of the Peo­ple’s Lib­er­a­tion Army off China’s Hainan Is­lands, caus­ing the death of a Chi­nese pi­lot.

Fan and Carter promised last week that the two sides will strive to reach an agree­ment on a code of con­duct re­gard­ing mil­i­tary en­coun­ters in the air-to-air an­nex by Au­gust, be­fore Xi’s visit to the US.

Fan and the Chi­nese gov­ern­ment are still up­set at the US Jus­tice Depart­ment’s in­dict­ment a year ago of five PLA of­fi­cers for al­leged cy­ber es­pi­onage, re­sult­ing in the sus­pen­sion of a bi­lat­eral work­ing group on cy­ber se­cu­rity set up about two years ago. They also have called it ir­re­spon­si­ble for US of­fi­cials to name China as the cul­prit for the re­cent hack­ing into the White House Of­fice of Per­son­nel Man­age­ment be­fore any se­ri­ous in­ves­ti­ga­tion.

While the US has ex­pressed con­cern over al­leged Chi­nese cy­ber es­pi­onage re­gard­ing US cor­po­rate se­crets, China said the US should re­duce and stop its wide-rang­ing es­pi­onage against China as re­vealed by Ed­ward Snow­den, a for­mer con­trac­tor for the Na­tional Se­cu­rity Agency (NSA).

China has ar­gued that its guide­lines for IT se­cu­rity equip­ment used in banks, which has raised eye­brows in the US in the past months, are for the sake of na­tional se­cu­rity. Many Sil­i­con Val­ley IT firms have been found to be will­ingly and un­will­ingly col­lab­o­rat­ing with the NSA, ac­cord­ing to Snow­den’s rev­e­la­tions. Schools of thoughts

There has been a lot of noise re­gard­ing how the US should re­act to the rise of China. In the re­port Re­vis­ing the US Grand Strat­egy To­ward China, Robert Black­will of the Coun­cil on For­eign Re­la­tions and Ash­ley Tel­lis of the Carnegie En­dow­ment for In­ter­na­tional Peace, ar­gued for a tougher US stance.

The Chi­nese del­e­ga­tion, usu­ally with about 100 peo­ple, will be led by Vice-Pre­miers

“Be­cause the Amer­i­can ef­fort to ‘in­te­grate’ China into the lib­eral in­ter­na­tional or­der has now gen­er­ated new threats to US pri­macy in Asia — and could re­sult in a con­se­quen­tial chal­lenge to Amer­i­can power glob­ally — Washington needs a new grand strat­egy to­ward China that cen­ters on bal­anc­ing the rise of Chi­nese power rather than con­tin­u­ing to as­sist its as­cen­dancy,” they wrote.

In a re­port re­leased in April — US-China 21: The Fu­ture of US-China Re­la­tions un­der Xi Jin­ping — Kevin Rudd, the for­mer Aus­tralian prime min­is­ter, ar­gued that de­spite dif­fi­cul­ties, the US-China re­la­tion­ship re­mains in de­cid­edly pos­i­tive ter­ri­tory.

Rudd, a flu­ent Man­darin speaker, said de­vel­op­ing a com­mon strate­gic nar­ra­tive for US- China re­la­tions may be dif­fi­cult, but it is cer­tainly not im­pos­si­ble. And given the stakes in­volved for the fu­ture, it is in­creas­ingly nec­es­sary, he added.

While the US has ac­cused China of try­ing to top­ple the cur­rent global gov­er­nance sys­tem and China said it is only seek­ing to re­form the sys­tem to re­flect the new re­al­ity of emerg­ing economies, Rudd said no one should as­sume that the cur­rent or­der can­not be rad­i­cally im­proved.

“The un­com­fort­able truth is that our ex­ist­ing sys­tem of global gov­er­nance, an­chored in the United Na­tions (UN) and the Bret­ton Woods in­sti­tu­tions, is be­com­ing in­creas­ingly dys­func­tional. We can see this in its cum­ber­some re­sponse to the great global se­cu­rity, eco­nomic, so­cial and en­vi­ron­men­tal chal­lenges of our time,” he wrote.

“For this rea­son, no one should as­sume, a pri­ori, that a greater Chi­nese role in the or­der is by def­i­ni­tion detri­men­tal. That is sim­ply not the case. The ques­tion is whether the un­fold­ing dy­nam­ics in US-China re­la­tions will re­sult in an in­ter­na­tional sys­tem that is bet­ter or worse than the present one, warts and all.” Wang Yang and Liu Yan­dong and State Coun­cilor Yang Jiechi as spe­cial rep­re­sen­ta­tives for Pres­i­dent Xi Jin­ping. The US side will be headed by Sec­re­tary of State John Kerry and Trea­sury Sec­re­tary Jack Lew as Obama’s spe­cial rep­re­sen­ta­tives.

Mean­while, the fifth Strate­gic Se­cu­rity Di­a­logue (SSD), to be at­tended by civil­ian and mil­i­tary of­fi­cials, will be held on June 22 and headed by Ex­ec­u­tive Vice-For­eign Min­is­ter Zhang Ye­sui and US Deputy Sec­re­tary of State Antony Blinken.

The S&ED in­cludes a “strate­gic track” and an “eco­nomic track.” The two sides will pro­duce joint out­come doc­u­ments at the end of the meet­ing on June 24.

Co­op­er­a­tion has in­deed been grow­ing de­spite dif­fer­ences and some­time ri­valry. China and US mil­i­taries have stepped up mil­i­tary-tomil­i­tary ex­changes and co­op­er­a­tion in the past two years, in­clud­ing more high-level vis­its and joint ex­er­cises.

The PLA Navy for the first time par­tic­i­pated in the Rim of Pa­cific Ex­er­cise (RIMPAC) war games last year. And Fan last week in­vited Carter and Ad­mi­ral Harry Harris, the new com­man­der of the US Pa­cific Com­mand, to visit China.

On the eco­nomic front, many Chi­nese still see the Trans-Pa­cific Part­ner­ship (TPP) as a US scheme to cut China out of the Asia sup­ply chain, as ar­gued by Columbia Univer­sity No­bel lau­re­ate Joseph Stiglitz early this year. Some Chi­nese of­fi­cials and pun­dits have ex­pressed in­ter­est in un­der­stand­ing the TPP and weigh­ing the pros and cons of a po­ten­tial par­tic­i­pa­tion in the cur­rently snagged trade ne­go­ti­a­tion among 12 coun­tries.

Obama was dealt a ma­jor blow last Fri­day by Democrats in the House of Rep­re­sen­ta­tives when he tried to lobby for Trade Pro­mo­tion Au­thor­ity (TPA) that would al­low the White House to fast-track trade talks, with­out which a con­clu­sion of the ne­go­ti­a­tion looks im­pos­si­ble.

The US suf­fered a ma­jor set­back two months ago try­ing to per­suade its al­lies not to join the China-led Asia In­fra­struc­ture In­vest­ment Bank (AIIB), only to see al­lies from Asia to Europe, such as Bri­tain, Aus­tralia and South Korea, join­ing the new bank as found­ing mem­bers. But US of­fi­cials have since changed their rhetoric by wel­com­ing the new in­sti­tu­tion, which the US is not con­sid­er­ing join­ing now.

China has also drawn much at­ten­tion with the launch of the Belt and Road Ini­tia­tive, orig­i­nally known as the land-based Silk Road Eco­nomic Belt and ocean­go­ing Mar­itime Silk Road, aimed at de­vel­op­ing con­nec­tiv­ity and co­op­er­a­tion among coun­tries, mostly de­vel­op­ing na­tions. Such a move, while be­ing warmly ap­plauded by many, has been seen by some in the US as a threat to US in­flu­ence.

Daly, of the Kissinger In­sti­tute, said the US should in­di­cate that it wel­comes a con­struc­tive Chi­nese role in shap­ing the in­ter­na­tional en­vi­ron­ment and pro­vid­ing in­ter­na­tional public goods.

“It could do this by ex­press­ing sup­port for the ‘One Belt One Road’ ini­tia­tive, pro­vided that the pro­gram is car­ried out in a trans­par­ent man­ner, with in­put from civil so­ci­ety groups in par­tic­i­pat­ing coun­tries, and with re­spect for en­vi­ron­men­tal im­pacts and la­bor and hu­man rights,” he said.

In meet­ing Fan last week, US Na­tional Se­cu­rity Ad­vi­sor Su­san Rice ex­pressed that the US is pay­ing great at­ten­tion to com­mu­ni­ca­tion and co­or­di­na­tion on global is­sues such as Iran’s nu­clear pro­gram, coun­tert­er­ror­ism, cli­mate change and the fight against deadly Ebola.

Af­ter re­ceiv­ing much praise for the cli­mate deal reached last Novem­ber dur­ing Obama’s visit in Bei­jing, many hope both China and the US will con­tinue to show lead­er­ship dur­ing the S&ED and the days lead­ing to the UN Cli­mate Change Con­fer­ence in Paris late this year, when a legally bind­ing and uni­ver­sal agree­ment on cli­mate is ex­pected for all na­tions. Progress of BIT

Key on this year’s S&ED agenda will also be the Bi­lat­eral In­vest­ment Treaty (BIT), which con­cluded its 19th round of ne­go­ti­a­tions in Bei­jing last week.

In an April speech in Washington, Sheets, the Trea­sury un­der­sec­re­tary, dis­missed the char­ac­ter­i­za­tion of the BIT talks as slow. He cited the broad and far-reach­ing con­tent be­ing dis­cussed and ex­pressed op­ti­mism about mak­ing mean­ing­ful progress in a rel­a­tively short pe­riod of time.

The US is China’s top trade part­ner with bi­lat­eral trade ex­ceed­ing $550 bil­lion in 2014, while China trails Canada as the sec­ond-largest trade part­ner for the US.

Many be­lieve the BIT will un­lock huge new op­por­tu­ni­ties for bi­lat­eral in­vest­ment and trade. The US hopes China would fur­ther open up its ser­vice sec­tor to for­eign in­vest­ment, and the Chi­nese want the US to treat the grow­ing num­ber of Chi­nese in­vestors in the US in a fair man­ner and not use na­tional se­cu­rity as an ex­cuse to block their en­try into the coun­try. In­vest­ment by Chi­nese tele­com equip­ment gi­ant Huawei Tech­nol­ogy has hit that road­block many times with US elected of­fi­cials de­scrib­ing the com­pany as a pos­si­ble na­tional se­cu­rity con­cern.

A re­port re­leased on May 20 by the New York-based Rhodium Group and the Na­tional Com­mit­tee on US-China Re­la­tions showed that Chi­nese com­pa­nies are op­er­at­ing in 340 of the 435 US con­gres­sional dis­tricts, em­ploy­ing more than 80,000 Amer­i­cans.

Chi­nese com­pa­nies also spend hun­dreds of mil­lions of dol­lars each year on re­search and de­vel­op­ment ac­tiv­i­ties and cre­ate link­ages which can help foster US ex­ports of goods and ser­vices, ac­cord­ing to the re­port.

At the sub-na­tional level, US gover­nors and may­ors have ex­tended wel­com­ing arms to Chi­nese in­vest­ment and go to China regularly to woo Chi­nese in­vestors and boost ex­ports.

In his first trip to China ear-ly this month as Mary­land gover­nor, Larry Ho­gan said China is al­ready the state’s sec­ond-largest trad­ing part­ner. “We’d like to make it No 1 in the near fu­ture,” he said.

A US China Busi­ness Coun­cil re­port on Tues­day showed that China con­tin­ues to be an im­por­tant des­ti­na­tion for Amer­i­can goods and a sig­nif­i­cant con­trib­u­tor to US eco­nomic growth, de­spite a slow­down ver­sus pre­vi­ous years.

US ex­ports to China to­taled $120 bil­lion in 2014, mak­ing it the third­largest ex­port mar­ket for Amer­i­can goods be­hind Canada and Mexico. Over­all, 42 US states saw at least triple-digit ex­port growth to China since 2005 Con­tact the writer at chen­wei­hua@ chi­nadai­lyusa.com

Wang Yang, Vice-Premier of China John Kerry, US Sec­re­tary of State

Liu Yan­dong, Vice-Premier of China

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