Washington -- Senior US officials said the first day of the China-US Strategic and Economic Dialogue was constructive and fruitful, and touched on such controversial issues as exchange rate of the yuan and the reform of international financial institutions.
David Shear, director of the Office of China Affairs of the US Department of State, described the first day of the discussions as "very constructive" and "very candid," and covering "a broad range of common interests."
David Loevinger, Executive Secretary and Senior Coordinator for China Affairs and the Strategic and Economic Dialogue at the Treasury Department, said at a news briefing at the end of the first day that "the discussions have been very focused, very serious."
The two sides discussed climate change and clean energy, the world economic recovery, and the proper roles of their respective stimulus policies in encouraging that recovery, as well as how to prevent bubbles, US officials said.
They also said that the two sides discussed controversial issues such as the yuan's exchange rate and reforming of the international financial institutions like the International Monetary Fund (IMF), to give developing countries a greater voice in the governance of international finance.
"I think … it (the talk) was a full discussion of a range of economic and financial issues. We talked about China's exchange rate policy, they talked about their desire to reform the international monetary system," said Loevinger, who would not elaborate.
Many in the US have long blamed China's undervalued yuan as an important cause of the trade deficit between the two countries, and the US government – and particularly members of Congress – argue that China should raise the value of yuan to help make trade between the two countries more balanced. In fact, the value of yuan has risen by more than 20 percent since 2005.
On the question of IMF reform, developing countries have begun to demand increased representation there, and in other institutions that help govern the global economy. They argue that the international financial crisis has shown that wider membership is needed to better reflect the global financial order and to ensure similar crises do not happen again.
Loevinger said IMF reform was discussed only briefly on Monday and the topic would come up in tomorrow's session.
"Both sides, I think, agreed that these institutions need to be modernized to reflect the rise of China and other dynamic emerging market economies," he said.