China, U.S. Emphasize Common Ground Over Tensions in Summit

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Top U.S. and Chinese officials stressed the value of cooperation and discussion almost as often as they highlighted their dividing lines at the start of annual economic and diplomatic talks in Washington.

“Dialogue may fall short of expectations and sometimes nothing much is achieved, leaving everybody unhappy,” Chinese Vice Premier Wang Yang told an audience at the State Department in Washington on Tuesday. “Yet it would always be more preferable than confrontation.”

The U.S.-China Strategic and Economic Dialogue, ending tomorrow, will test participants’ ability to find common ground amid contentious issues, such as U.S. accusations of Chinese hacking into government computers and China’s construction of man-made islands in the disputed South China Sea. The two sides are hoping to ease tensions and find common ground before U.S. President Barack Obama hosts China President Xi Jinping for a state visit in September.

U.S. Treasury Secretary Jacob J. Lew said that China needs to make the yuan’s exchange rate more market-determined. China’s push to have the yuan recognized by the International Monetary Fund was discussed, one Treasury official told reporters after the day’s sessions. Pursuit of that goal was driving the country’s financial overhaul, the official said.

The two sides exchanged lists of industries they would exclude from foreign investment as part of talks on a broader trade deal. Zhang Xiangchen, deputy international trade representative for the Ministry of Commerce, told reporters the country was seeking greater U.S. transparency to prevent its companies from being restricted for national security reasons.

China Rising

The dichotomy of pleasantries and tensions was on display throughout the opening session.

“We do not fear China’s rise; we want to see China rise,” U.S. Vice President Joe Biden said. “A rising China can be a significant asset for the region and the world, and selfishly, for the United States.”

At the same time, Biden said the U.S. is and would remain a Pacific power.

Chinese State Councilor Yang Jiechi said that China and the U.S. should work together in the Asia-Pacific region, and China wished for a robust U.S. economy, which benefits the whole world. To that end, Finance Minister Lou Jiwei said the U.S. must contribute a greater share of global growth.

“As the world’s largest economy, the United States should take on more responsibilities,” Lou said, according to the official Xinhua News Agency.

Liu Yandong, a Chinese vice premier, urged both sides to “respect and accommodate each other’s core interests.”

One area where the two sides have found success in cooperation is in combating climate change. China may offer to make steeper cuts in the carbon intensity of its economy when it unveils a formal pledge to curb greenhouse gases, Bloomberg BNA’s Dean Scott reported, citing Todd Stern, U.S. special envoy for climate change.

Stern told reporters that China may strengthen its pledge to cut carbon intensity 40 percent to 45 percent by 2020 from 2005 levels. The country isn’t expected to alter its broader pledge for emissions to peak by 2030 and it get 20 percent of its energy from non-fossil fuels.

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