Talk pays when the going gets tough

Dialogue will boost economic ties, but China and the US should also strive for strategic collaboration

Given the complicated bilateral relations between China and the United States, the sixth round of their Strategic and Economic Dialogue held in Beijing offered a timely opportunity for them to exchange views on crucial economic and security issues of mutual concern.

Over the past five rounds of talks, economics have tended to overshadow strategic matters, as military and security issues are typically more sensitive than economic and trade ones. Each of the previous dialogues yielded a long list of areas for greater collaboration, ranging from climate change to energy security, and from balancing trade to investment.

This round of talks, over two days from July 9, was expected to do the same, and the representatives from both China and the US were pushing for more collaboration on the economic front. Since China's economic growth is slowing appreciably, Beijing is now looking to deepen economic reform. Over a couple of years reform has been launched in 60 major areas, covering more than 300 tangible items, and the government has said it will allow market forces to play a more decisive role in the economy. This will offer new opportunities to US businesses.

In addition, with its proposals of a Silk Road Economic Belt as well as the 21st Century Maritime Silk Road, China is trying to project more economic interaction and collaboration with its Asian neighbors and beyond. Lately Beijing has put forward its proposal to create an Asian Investment Bank of Infrastructure Development, offering collective financial resources that promise to be trillions of US dollars to advance Asia's infrastructure. By working together, Beijing and Washington can contribute as well as benefit from Asia's growing prosperity.

This round of the Strategic and Economic Dialogue was also due to address the divergences in economic policies between China and the US. The US' rebalancing to the Asia-Pacific and its Trans-Pacific Partnership could undermine China's competitiveness. China needs to boost its economic development and accelerate its efforts to move higher up the value chain. The aim is to promote a smooth transition where China incrementally improves its economy through cooperation and constructive competition, and the dialogue is a way of managing the cooperation and competition with the US.

However, the dialogue has yet to play such a positive role in managing their differences on security issues. Among a long list of issues on which the two countries differ, the maritime disputes in the East and South China seas and cybersecurity are the two most pressing at present. The US views China as destabilizing the status quo by being too assertive in the territorial disputes in the East China Sea and South China Sea. China perceives Japan's "nationalizing" of the main Diaoyu Islands as changing the status quo. Given the fact that both Hanoi and Manila used to admit that China has sovereignty over all islands and islets on the Chinese side of the Nine-Dash Line in the South China Sea, Beijing deems the Philippines' occupation of some of these islands as unacceptable. Unless there is some real engagement among the various parties, tensions are likely to continue to rise.

As the US is an ally of both Japan and the Philippines and has made itself an interested party in the disputes, Beijing and Washington need to discuss risk avoidance and ways to take some of the steam out of the current tensions.

The complex security relationship between China and the US has taken another hit since the last dialogue meeting. Despite the US' cyber espionage against China, which has been clearly revealed by the former CIA contractor Edward Snowden, China has been willing to partner with the US through a joint Working Group on Cybersecurity, which was set up after the last dialogue. However, while the US has still failed to give China any explanation for its spying, it has indicted five Chinese People's Liberation Army officers for allegedly conducting cyberattacks against the US. This move has obstructed the work of the joint working group.

However, China and the US are still trying to partner whenever possible, especially since President Xi Jinping and his US counterpart Barack Obama agreed that both sides should realize the importance of seeking cooperation while avoiding confrontation after the last dialogue meeting.

"Our interests are more than ever interconnected," Xi said on July 9 in his speech at the opening ceremony for this year's dialogue, saying the two countries "stand to gain from cooperation and lose from confrontation".

"If we are in confrontation it will surely spell disaster for both countries and for the world," he said, adding that the Pacific powers need to "break the old pattern of inevitable confrontation".

In a statement issued by the White House on July 9, Obama said the US is committed to building a "new model" of relations with China that is defined by cooperation and the constructive management of differences. "We remain determined to ensure that cooperation defines the overall relationship," Obama said.

In fact, Beijing and Washington are already successfully working together on many issues, such as maintaining the stability of the Korean Peninsula, collaborating in international efforts to dismantle Syria's chemical weapons arsenal, and through a decade of difficult engagement with Iran. China's persistent stance of settling the Iranian nuclear issue peacefully has gained steam with the "6+1" negotiations.

As Beijing and Washington nurture their new model of a major-country relationship through its infancy, it is unrealistic to expect it to always be plain sailing. It is due to the challenges they face when it is not going smoothly that the strategic dialogue is so important.

The author is professor and associate dean of the Institute of International Studies, Fudan University. The views do not necessarily reflect those of China Daily.

(China Daily Africa Weekly 07/11/2014 page11)