PRC, US are set for ‘vig­or­ous’ talks over key re­gional is­sues


The United States is vow­ing not to “pa­per over” dif­fer­ences with China at key talks this week weighed down by thorny is­sues of trade, cy­ber spy­ing and ten­sions in the South China Sea.

And while some an­a­lysts be­lieve there will be few con­crete re­sults from the an­nual U. S.- China Strate­gic and Eco­nomic Di­a­logue, the two- day talks which open for­mally on Tues­day in Washington are seen as an im­por­tant fo­rum for man­ag­ing ties be­tween the two global pow­ers.

“We talk through, we work through our dif­fer­ences. We seek to solve prob­lems and to man­age the prob­lems that we can’t seem to solve,” said the top U. S. diplo­mat for East Asia, Danny Rus­sel.

“We don’t pa­per over these dif­fer­ences. We don’t turn a blind eye to prob­lems. We dis­cuss them and we seek to tackle them di­rectly.”

U. S. Sec­re­tary of State John Kerry and Trea­sury Sec­re­tary Jack Lew will host China’s State Coun­cilor Yang Jiechi and Vice Premier Wang Yang for a pri­vate din­ner on Mon­day, be­fore the talks kick off at the State Depart­ment the next day.

The world’s two lead­ing economies re­main at odds over China’s claims to much of the South China Sea and Washington has re­peat­edly urged Bei­jing to stop build­ing ar­ti­fi­cial is­lands in the key wa­ter­way.

Such moves are “trou­bling not just to us, but to the coun­tries in the re­gion,” Rus­sel said, adding: “The prospect of mil­i­ta­riz­ing those out­posts runs counter to the goal of re­duc­ing ten­sions.”

Hack­ing Charges

Ties have also strained over U. S. ac­cu­sa­tions of cy­beres­pi­onage.

A bi­lat­eral cy­ber- work­ing group was sus­pended by Bei­jing last year af­ter Washington in­dicted five Chi­nese mil­i­tary of­fi­cers for hack­ing into U. S. com­put­ers to pil­fer in­tel­lec­tual prop­erty and U. S. gov­ern­ment se­crets. But both coun­tries rec­og­nize it is an area where they need to co­op­er­ate.

“It’s a place where us and China both have very im­por­tant eq­ui­ties and as in the past, we’ll con­tinue to dis­cuss those is­sues vig­or­ously with our Chi­nese coun­ter­parts,” a U. S. Trea­sury of­fi­cial said.

Chi­nese of­fi­cials re­mained more cir­cum­spect with for­eign min­istry spokesman Lu Kang say­ing the del­e­ga­tions would have an “in- depth ex­change of views on China- US re­la­tions as well as other ma­jor is­sues of com­mon in­ter­est.”

And the state- run Chi­nese press ap­peared op­ti­mistic about this sev­enth round of an­nual talks, which come ahead of a visit to the U. S. by Chi­nese Pres­i­dent Xi Jin­ping in Septem­ber.

“Fol­low­ing months of diplo­matic clashes over the South China Sea, Sino- U. S. re­la­tions seem to be headed for calmer wa­ters af­ter key events in the lead- up to a ma­jor meet­ing be­tween the two coun­tries,” the China Daily said.

It quoted Wang Yi­wei, a pro­fes­sor of in­ter­na­tional re­la­tions at Ren­min Univer­sity, say­ing: “Washington un­der­stands the con­se­quences of U. S- Sino con­fronta­tion, and con­flict is not on the agenda.

“Still, it has to is­sue crit­i­cisms of China over the South China Sea to show its mus­cle and com­mit­ment to its Asian al­lies.”

Not All Doom and Gloom

Other knotty prob­lems re­main over trade, the new Bei­jing- led Asian In­fra­struc­ture In­vest­ment Bank — spurned so far by the U. S. — and whether to in­clude the Chi­nese yuan as part of the IMF’s in­ter­na­tional bas­ket of ref­er­ence cur­ren­cies.

Washington has long claimed the yuan was ma­nip­u­lated, but the IMF said late last month that the cur­rency was “no longer un­der­val­ued.”

Such dif­fer­ences do “not nec­es­sar­ily doom the di­a­logue,” said Adam Posen, pres­i­dent of the Peter­son In­sti­tute for In­ter­na­tional Eco­nom­ics, adding the talks will still be “pro­fes­sional.”

And David Dol­lar, an ex­pert with the Brook­ings In­sti­tu­tion, pre­dicted the chill in ties aris­ing from se­cu­rity is­sues would not spill over into the eco­nomic track.

Both coun­tries “have com­pelling rea­sons to have a ro­bust dis­cus­sion of eco­nomic trends and to try to make progress on bi­lat­eral is­sues,” he said.

“If any­thing, ten­sion on the se­cu­rity side makes the eco­nomic talks more im­por­tant.”

One po­ten­tial area of co­op­er­a­tion is on cli­mate change, as U. N.- led talks loom in Paris in De­cem­ber to set new tar­gets on lim­it­ing green­house gases.

“We’re still the two largest emit­ters in the world. We’re try­ing to po­si­tion our­selves and lead, frankly, the in­ter­na­tional com­mu­nity into the Paris con­fer­ence,” said Rus­sel.

There is con­cern in Bei­jing how­ever over Pres­i­dent Barack Obama’s woes with Congress, par­tic­u­larly in try­ing to push for­ward a huge Pa­cific trade deal — even though it will not in­clude China.

The Chi­nese “start to won­der, can the U. S. gov­ern­ment ex­e­cute things in its own self­in­ter­est?” said Posen.

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