Bizchina

Dialogue seeks to reach consensus

(China Daily)
Updated: 2010-05-25 11:24

Yuan Gangming, research fellow with the Center for China in the World Economy at Tsinghua University

Attention should be kept on bilateral cooperation instead of conflict and friction at the ongoing second round of China-US Strategic and Economic Dialogue.

The two countries reiterated their stance of keeping dialogue and cooperation in macroeconomic policies on both occasions of the first round of the dialogue and the joint statement following President Obama's China visit last November.

The consensus will be repeated at this round of talks, especially after the eruption of the debt crisis in Europe.

China and the US must sit down to discuss how to cope with the new conditions created by the post-crisis period, and how to act together to curb the debt.

As the world economy picks up, neither of the two big countries are willing to see serious fluctuations in the euro, a major world currency, which would bring uncertainty to global markets.

The debt crisis caused much uncertainty to the economic recovery in both China and the US. They originally enjoyed warmer climes in the first quarter but now the situation has changed after China launched a series of tightening policies to rein in rising real estate prices and the US faces violent market fluctuations and financial instability.

Before this round of talks started, the US for the first time showed signs of a softening on technology transfer to China, a sharp departure from its past stance. Washington has realized that China is its largest real market for such exports.

In the field of clean energy, the two countries supplement each other perfectly with China having the market while the US has the technology.

China has received softer words on the yuan exchange rate and its trade surplus is decreasing, while the US is aware that the appreciation of the yuan cannot solve its trade deficit and unemployment problems.

But, at present, it is unlikely that the US will squeeze unrealistic promises out of China, which, sandwiched between the debt crisis in the European Union and housing tightening at home, has been firm on a stable yuan policy.