Dialogue Mechanism Leads to New Sino-U.S. Relations
For the strategic track of the S&ED, the two sides also held dialogues on strategic security, economic development and reform, climate change policy, as well as further consultations on UN peacekeeping, Sudan and South Sudan issues, and fighting illegal wildlife trade. The two sides signed an Eco Partnership Program.
This strategic track has reached 116 achievements covering eight areas, including cooperation in energy and climate change, environmental protection, science, and several other important fields.
Also important is that China and the U.S. have vowed to increase exchanges and collaboration between their militaries, and to increase communication and coordination on Asia-Pacific issues to build a more stable, peaceful and prosperous region.
A highlight of this round of dialogue is bilateral cooperation on energy and climate change. Remarkable progress has been made since the two countries established the Climate Change Working Group in 2013. Joint efforts have focused on reducing greenhouse gas emissions, increasing carbon fixation, recycling and sequestration, improving energy efficiency, and developing smart power grids.
Mr. Kerry declared during the dialogue that the participation of private businesses and academic institutions have brought greater diversity and dynamics into their cooperation. Under the framework of the Eco Partnership Program, Chinese and American partners have carried out exploratory cooperation in such fields as energy saving, energy efficiency, clean energy, ecological conservation and the circular economy. The results will boost economic growth, energy security and sustainable environmental development.
Trade and Economic Opportunities
For the economic track of the S&ED, forums were held on macroeconomics and structural reforms, deepening cooperation in trade and investment, opening and reform of the financial industry and cross-border supervision. Nearly 90 achievements were reached.
At present, negotiations are underway on several major pacts, and substantial progress has been made. Among them are the Information Technology Agreement (ITA) and the Bilateral Investment Treaty (BIT). The former will be a priority at the APEC meeting convened later this year. During the S&ED representatives from both countries discussed the expansion of the ITA and agreed to restart plurilateral negotiations. The BIT will have far-reaching impacts on future ties between China and the U.S. During the July dialogue the two countries agreed to reach a consensus on major provisions of the BIT by the end of 2014, and promised to initiate negotiations on the “negative list” in early 2015. The U.S. promised to maintain an open investment environment for Chinese investors.
Over the 35 years since the establishment of full diplomatic ties, bilateral trade has ballooned more than 200 fold, exceeding US $520 billion in 2013. Cumulative two-way investments top US $100 billion, and for the first time China’s investments in the U.S. surpassed the U.S.’s investments in China. Growing two-way investment is playing a bigger role in job creation and economic growth in both countries.
The two sides also agreed to strengthen financial cooperation. The U.S. pledged to treat China fairly in its export control system and encourage high-tech exports to China. The two sides will coordinate policies on shadow banking, over-the-counter derivatives regulation, cross-border audit inspection and international insurance matters. The signing of an inter-governmental agreement on the Foreign Account Tax Compliance Act (FATCA) also drew wide attention.
On macro economic policies, both parties made compromises and commitments. China promised to cut interference with the exchange rate, allowing it greater flexibility under market forces. The U.S. will work to further cut its federal budget deficit, lower the debt-GDP ratio and pay more attention to the impact of its currency policies on the global financial system. The two countries will work jointly in the APEC later this year, and strengthen coordination and cooperation in mechanisms such as the G20.
People-to-People Exchanges
“A foreigner takes a bath, a riddle! The answer is ... hotpot mutton.” This linguistic pun, whereby the Chinese for “foreigner” sounds the same as that for “mutton,” brought laughter from the audience. This is an episode at an event celebrating the 35th anniversary of student exchanges between China and the U.S. during the 2014 High-Level Consultation on People-to-People Exchange (CPE), which focuses on forging closer links between the two countries’ youth.
Three more activities were organized for the Consultation – a school cooperation program proposed by the two first ladies Peng Liyuan and Michelle Obama, the award ceremony for winners of the China-U.S. Young Makers Competition and a dialogue between young researchers at Chinese and American think tanks.
