For a few days this week, Americans may be forgiven for thinking their
government is being run from Beijing when nearly half the Bush cabinet is in the
Chinese capital for wide-ranging parleys.
A high-level US delegation headed by Treasury Secretary Henry Paulson and
comprising six members of cabinet rank in addition to the Fed chief are expected
to arrive today for the first-ever Sino-US strategic economic dialogue that
Vice-Premier Wu Yi and Paulson, who lead the delegations, will discuss a
number of economic fronts at the two-day meeting.
Paulson is accompanied by a host of top American officials, including US
Federal Reserve Chairman Ben Bernanke and four Cabinet members Commerce
Secretary Carlos Gutierrez, Energy Secretary Samuel Bodman, Labor Secretary
Elaine Chao and Health and Human Services Secretary Mike Leavitt.
US Trade Representative Susan Schwab and the head of the Environmental
Protection Agency, Stephen Johnson, both of cabinet rank, also are attending.
The Chinese side will be represented by a top-level team including National
Development and Reform Commission Minister Ma Kai, Finance Minister Jin Renqing,
People's Bank of China Governor Zhou Xiaochuan and the heads of agriculture,
health and information ministries.
Issues to be discussed are expected to include the bilateral trade imbalance,
the renminbi exchange rate, increased opening-up of China's financial sector to
foreign competition, intellectual property rights protection as well as
restrictions on high-tech US exports to China.
The US officials will also meet President Hu Jintao and Premier Wen Jiabao
during their stay in Beijing.
On the eve of the US delegation's visit, the Bush administration on Monday
criticized China's record on opening its markets and said the US would not
hesitate to seek economic sanctions.
Calling China's record "decidedly mixed," Schwab released a 100-page report
that accused Beijing of failing to live up to commitments it made five years ago
when it joined the World Trade Organization.
"Certain industries face frustrating barriers to doing business in China and
there are worrisome signs that China's market liberalization efforts have slowed
in the last year," Schwab said in a statement.
The administration said it would not hesitate to use all the tools available
including bringing cases against China before the WTO if the country did not do
more to lower barriers to American exports and US companies seeking to operate
But Foreign Ministry spokesman Qin Gang yesterday rejected the charges.
"We have fulfilled our obligations and commitments earnestly and have abided
by the rules of the World Trade Organization," he told reporters at a regular
He said the Chinese market is opening up gradually, and "disputes between the
two countries should be solved through friendly dialogue on an equal footing."
Despite the dissonance, analysts said that the size and stature of the
biggest US government delegation ever to visit Beijing shows how serious the two
countries are about reshaping bilateral economic relations.
Ruan Zongze, a senior researcher with the China Institute of International
Studies, said Beijing and Washington are exploring new approaches to their
disputes and the goal of the dialogue is ambitious, seeking changes across a
spectrum of issues from monetary policy to energy and social services.
He noted that bilateral economic relations are vital to the prosperity of
both countries and the world at large. "The strategic economic dialogue sends a
clear signal to the world that the two countries are devoted to building a
mutually beneficial, win-win and co-operative partnership," Ruan said.
While US lawmakers and business interests seek quick, tangible results,
Paulson tempered that optimism, saying there would be no major announcements
after the high-level visit. He told reporters earlier in London that he views
the meeting as the beginning of a "long-term" discussion and that simply sitting
down to discuss economic issues with top Chinese officials should be seen as
Despite pressing China for greater currency flexibility, Paulson also wants
close discourse about long-term economic goals with Beijing leadership.
A Chinese official was quoted by US media on condition of anonymity as saying
that China wants the dialogue to show to the United States that Beijing is doing
all it can within its system and that it plans to do more at its own pace.
"We understand the political complexities in the United States," said the
official. "But when it comes to political issues, we hope the politicians will
listen to the experts."
Wang Yizi, professor at Shanghai-based Fudan University said the presence of
Bernanke, who is not part of the Bush administration, would mean that the two
sides would talk about economic issues on their merits and avoid politicizing
American experts with the Heritage Foundation said the dialogue is an
opportunity to promote economic freedom and address challenge both two countries
In an article published jointly, Michael Needham, John Tkacik and Tim Kane
said it is important for the American side to discuss their concerns with the
Chinese without lecturing Chinese officials on where their interests lie.
"American and Chinese interests ultimately lie in economic freedom and it is
vital to move rapidly to address the issues standing in the way," they said.
The world will also be following the dialogue closely for mainly two reasons,
according to Joergen Oerstroem Moeller, a former Danish ambassador and now
visiting senior research fellow at the Institute of Southeast Asian Studies in
First, "both the United States and China share a vital interest in economic
globalization and have to exercise leadership in maintaining a well-functioning
global economy," Moeller told China Daily via email.
Second, the two sides must talk about how to stimulate
global growth next year. "This is actually the most important. All indicators
predict that we are already witnessing lower global growth, which will continue
into 2007," Moeller said. "There is no need to elaborate on the political and
economic problems a significant lower growth rate will bring along for the