The third U.S.-China Strategic and Economic Dialogue (S&ED) will take place on May 9-10 in Washington, D.C. Chaired once again by Secretaries Clinton and Geithner on the U.S. side and Vice Premier Wang Qishan and State Councilor Dai Bingguo on the Chinese side, the dialogue will bring together about a dozen Cabinet and Ministerial rank figures on both sides along with a host of Vice Ministers and other senior officials from a nearly a score of departments.
The S&ED was not conceived as a mechanism to deal with bilateral crises or to produce specific “deliverables,” but to develop a richer, more intensive dialogue between senior officials on the two sides than would be possible in the usual quick in-and-out visits, and to break down bureaucratic stovepipes among agencies, particularly on the Chinese side, not accustomed to coordinating effectively with each other. It provides a way to sustain and propel cooperation on issues like energy and environment, development assistance, and food security that might not get sufficient attention in regular bilateral meetings dominated by urgent and pressing issues. It also serves as a reminder to top officials on both sides of the diversity and complexity of the relationship, to help them put problems in the broad context of the relationship rather than allowing individual problems to spiral out of control.
One of the notable features of this year’s S&ED will be the participation of a senior PLA officer, General Ma Xiaotian, for the first time. The Obama administration has sought to develop a dialogue with the Chinese on the most difficult global security issues that have the potential to lead to conflict. U.S.-China dialogue in such areas has lagged beyond even the levels of U.S. discussions with the former Soviet Union, in part because of Chinese difficulty in engaging civilian and military officials in the same discussion and because of Chinese reluctance to discuss such issues from a position of relative weakness. It would be a significant first step toward long term tension reduction and conflict management if the two sides can engage in serious discussions on at least some of these issues.
The S&ED comes at a time when U.S.-China relations are in fundamentally sound condition. President Hu Jintao’s visit to the United States was generally assessed as setting a realistic tone and achieving successes in a relationship that will always be marked by frictions. President Obama, who will be involved in the S&ED, has put a high priority on U.S.-China relations, and the two sides have cooperated, within limits, on major security issues, including Iran, Korea, Sudan, Libya, and nuclear security. From the U.S. perspective, it will certainly not hurt that the meeting comes only a week after the successful raid that eliminated Osama bin Laden, which sends a message of U.S. strength and credibility in a relationship where those qualities are always the subject of Chinese scrutiny. The United States and China have developed reasonable expectations about both the possibilities and limits of cooperation, which will reduce the chances of future miscalculation. All of these subjects, plus broader developments in the Middle East, will be on the agenda of the S&ED.
On the economic side, the need for the RMB to appreciate will be on the agenda, but will not be the kind of preoccupying issue that it was for much of the Obama administration’s first two years. This is because China has allowed a 5 percent rise in the value of the RMB over the last year, and with inflation its competitive advantage vis-à-vis the dollar has declined about 10 percent. Other issues, such as ensuring that Hu Jintao’s commitments on indigenous innovation discriminatory policies, IPR protection, and market access, will draw more attention. Also likely to be discussed will be the investment climate not only for U.S. companies in China but for Chinese companies in the United States.
Protection of human rights will feature as well in Secretary Clinton’s dialogue with Dai Bingguo, largely because of the repressive domestic atmosphere imposed by Chinese authorities in the wake of the “Arab Spring” in order to avoid contagion. The two sides recently held a human rights dialogue at the level of Assistant Secretaries, in which the U.S. side took a thoughtful approach of stressing issues of concern to Chinese people and groups, mitigating the risks of appearing to be imposing U.S. customs and norms on a suspicious China. That said, history encourages modest expectations about the fruits of U.S.-China dialogue on human rights. The Chinese see this as an issue to be dealt with domestically and managed internationally, not as one where they need to accommodate foreign complaints.