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Order from Chaos

S&ED: Chinese and American media tell two tales

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Reading the Chinese- and English-language media on the high-level dialogue last week, one wonders if they were covering the same event. Major Chinese media outlets including Xinhua and People’s Daily hailed the completion of the 7th round of the Strategic and Economic Dialogue (S&ED), which wrapped up in Washington, D.C. last Thursday. On Xinhua’s well-designed S&ED feature page, the top two stories were titled: “Over 70 outcomes were achieved in the economic track co-led by Wang Yang and Jacob Lew” and “The strategic track headed by Yang Jiechi and John Kerry enumerated over 120 outcomes.” The “biggest achievement,” wrote People’s Daily, was that the two sides “reset a positive keynote for U.S.-China relations…. the positive attitudes the two sides presented during the meeting greatly weakened some previous pessimistic assumptions largely caused by some sensitive issues.” The “issues,” about which the Chinese media were vague, include tensions in the South China Sea and cyber espionage that led to a chill in U.S.-China relations.

The “second biggest achievement,” People’s Daily wrote, is that “old topics made new progress.” Three major issues that are not new to the S&ED, including “macroeconomic policy and structural reform, promoting trade and investment, and financial market reform” reached “new agreements.” More importantly, “a clear timeline”—September 2015—has been set for the second round of negative list exchange for the all-important Bilateral Investment Treaty negotiations. The economic discussions made the “bilateral economy, as the anchor of U.S.-China relations, more stable; and paved the way for Xi’s visit in September.” At the end of some articles, concerns were expressed over American market access restraint to Chinese companies, especially SOEs, in sectors such as infrastructure and telecommunications.

A Xinhua article published last Friday entitled “International news media reached an extensive consensus over the S&ED” said major international media outlets including Associated Press (AP) and the New York Times (NYT) believed the dialogue achieved “tremendous outcomes.” The “achievements show U.S.-China relations are heading towards a direction that promotes understanding, expands consensus, manages differences and increases cooperation.”

However, U.S. press coverage of the S&ED does not echo the enthusiasm of their Chinese counterparts. First, the level of attention given to the S&ED differed. In American news outlets, reports of the S&ED did not make front-page headlines, and one needs to dig deeply into websites to find the relevant reports. New York Times coverage, for example, was buried deep in the business section. Second, the tone of the majority of reports was consistently pessimistic. Wall Street Journal (WSJ), Bloomberg, and AP all used the word “tensions” in their headlines. Different from the Chinese media’s vague comments, the U.S. press explicitly lists the areas of tension: China’s reclamation in the South China Sea and alleged cyber-theft harming U.S. businesses. For the final outcomes, most media reports agreed with the WSJ that the discussions were “frank,” but “little progress was made on either issue.” The two sides “had agreed…to complete a code of conduct on cyber activities,” John Kerry was quoted in AP. However, China’s cyber commitment is not in the list of outcomes released after the meeting. On the maritime security issue, the two countries have reached a stalemate, with the Chinese side insisting that “there is no crisis in the South China Sea” and that China’s behavior is “beyond reproach…because the U.S. is not a claimant,” wrote AP.

The U.S. press was also negative about the economic track outcomes, in which both sides had high expectations. Only “incremental gains” were made on financial issues, according to a Bloomberg report—namely China’s commitment not to intervene in the foreign exchange market unless there are “disorderly market conditions.” Bloomberg quoted Secretary Lew stating that “the real test will be what China does when there’s pressure on the yuan to strengthen.” As to China’s currency joining the International Monetary Fund’s Special Drawing Right (SDR) currency basket, the United States thinks China needs to further “open up its financial system” to get the “IMF blessing.”

Why such differences in coverage? One factor is that Chinese officials are largely happy with the status quo whereas the U.S. government is not. On reclamation in the South China Sea, cyber-theft, and access to China’s markets, the U.S. side is frustrated with lack of progress while the Chinese side prefers to see the current situation as stable and positive. These differences create some risks for the upcoming state visit of Xi Jinping. As quoted in the official media above, the Chinese view is that the achievements in this round of the dialogue pave the way for a successful Xi visit, whereas the U.S. view would be better summarized as: The dialogue teed up the issues on which there needs to be progress in order to have a truly positive state visit. Unfortunately, the different outlooks create a large potential for disappointment on both sides. 

Authors

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Wei Wang

Senior Research Assistant - John L. Thornton China Center, Brookings Institution

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