CHINA

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17 December 2007
Third U.S.-China Economic Dialogue Ends with Multiple Agreements

By Robin Yeager
USINFO Staff Writer

Washington -- From product safety to financial sector reform, energy and the environment, tensions between two of the world’s largest economies make frequent headlines. The United States and China have a complex relationship -- increasingly connected, occasionally at odds.

Managing that relationship and addressing the wide array of related issues requires the top-level, multifaceted approach found in the U.S.-China Strategic Economic Dialogue (SED), which held its third meeting December 12-13 near Beijing.

The Strategic Economic Dialogue is a Cabinet-level forum for articulating long-term economic objectives while managing short-term challenges to the relationship. The SED was created by Presidents George W. Bush and Hu Jintao in September 2006.

For this round, Treasury Secretary Henry Paulson led the U.S. team of six Cabinet officials and agency heads in discussions with China Vice Premier Wu Yi and a delegation of 13 ministers and agency heads.

The meeting resulted in a number of agreements. Issues addressed by those agreements include those related to food and feed products -- in particular, trade in meat, poultry and egg products and the safety of drugs and medical devices.

The parties agreed on environmental management related to imports and exports and addressed regulatory standards for alcohol and tobacco products. These advances build on three previous agreements on consumer products signed in recent months covering toys, fireworks, lighters, electrical products, motor vehicles and pesticides.

As a result of this SED round, U.S. companies will have new opportunities to finance and expand sales in China. In addition, China will complete a study on policies governing foreign participation in banking and equities sectors by the end of 2008, paving the way for greater participation by U.S. companies. Chinese mutual funds will be able to invest in U.S. companies, benefiting both countries.

The delegations also agreed on further implementation of previous SED commitments, including those on securities and foreign investment in China’s domestic stock market. They pledged to work on transparency in trade regulations and procedures, including their respective World Trade Organization and Asia-Pacific Economic Cooperation obligations, and licenses.

The parties pledged that, over the next 10 years, they will address energy efficiency and security as well as climate change -- including technological innovation and implementation and sustainability of natural resources. Specific steps related to these issues include developing low-sulfur fuels and biofuels, eliminating barriers to trade in environmental goods and services and cooperating on strategic oil stocks. The two parties also reached agreements addressing water quality, timber logging and emissions trading.

Encouragement of innovation will play a major role in accomplishing the ambitious goals, especially on environmental factors, the parties agreed, and policies should do so while protecting intellectual property. They agreed the dialogue, on this and other topics, should continue and expand at all levels.

The fourth SED will be held in Washington in June 2008.

A joint U.S.-China fact sheet and a U.S. fact sheet on the third round and the full text of Paulson's closing remarks can be found at the Treasury Department's Web site.

For related stories, see The United States and China.

(USINFO is produced by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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