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Given the complicated bilateral relations between China and the United States, the ongoing sixth round of their Strategic and Economic Dialogue taking place in Beijing offers a timely opportunity for Beijing and Washington to exchange views on crucial economic and security issues of mutual concern.

The S&ED has been designed, as its name suggests, for the two countries to discuss both economic and strategic matters. But over the past five rounds of talks, the economic aspect has tended to overshadow the strategic one, as military and security issues are typically more sensitive than economic and trade ones. Each of the previous dialogues yielded a long list of areas for greater cooperation, ranging from climate change to energy security, and from trade balancing to investment.

This round of talks is expected to do the same, and the representatives from both China and the United States will be pushing for more collaboration on the economic front. Since China's economic growth is slowing quite appreciably, Beijing is now looking to deepen its economic reform. Over a couple of years reform has been launched in 60 major areas, covering over 300 tangible items, and the government has said it will allow market forces to play a more decisive role in the economy. This will offer new opportunities to US businesses.

In addition, with its proposals of a Silk Road Economic Belt as well as the 21st Century Maritime Silk Road, China is trying to project more economic interaction and collaboration with its Asian neighbors and beyond. Lately Beijing has put forward its proposal to create an Asian Investment Bank of Infrastructure Development, offering collective financial resources that promise to be trillions of US dollars to advance Asia's infrastructure. By working together, Beijing and Washington can contribute as well as benefit from Asia's prosperity buildup.

This round of the S& ED is also due to address the divergences in economic policies between China and the US. The US' rebalancing to the Asia-Pacific and its Trans-Pacific Partnership could potentially undermine China's competitiveness. China needs to boost its economic development and accelerate its efforts to move higher up the value chain. The aim is to promote a smooth transition where China incrementally improves its economy through cooperation and constructive competition, and the S& ED is a way of managing the cooperation and competition with the US.

However, the S& ED has yet to play such a positive role in managing their differences on security issues. Among a long list of issues on which the two countries differ, the maritime disputes in the East and South China seas and cybersecurity are the two most pressing at present. The US views China as destabilizing the status quo by pushing the envelope with regard to the territorial disputes in the East China Sea and South China Sea. While China perceives Japan's "nationalizing" of the main Diaoyu Islands as changing the status quo. Given the fact that both Hanoi and Manila used to admit that China has sovereignty over all islands and islets on the Chinese side of the Nine-Dash Line in the South China Sea, Beijing deems the Philippines' occupation of some of these islands as unacceptable. Unless there is some real engagement among the various parties, tensions are likely to continue to rise.

As the US is an ally of both Japan and the Philippines and has made itself an interested party in the disputes, Beijing and Washington should use this round of the S& ED to discuss risk avoidance and ways to take some of the steam out of the current tensions.

The complex security relationship between China and the US has taken another hit since the last round of the S&ED. Despite the US' cyber espionage against China, which has been clearly revealed by the former CIA contractor Edward Snowden, China has been willing to partner with the US through a joint Working Group on Cybersecurity, which was launched after the last dialogue. However, while the US has still failed to give China any explanation for its spying, it has also indicted five Chinese People's Liberation Army officers for allegedly conducting cyberattack against the US. This move has obstructed the continuation of the joint working group.

However, China and the US are still trying to partner proactively whenever possible, especially since President Xi Jinping and his US counterpart Barack Obama agreed that both sides should realize the importance of seeking cooperation while avoiding confrontation after the last round of the S&ED.

"Our interests are more than ever interconnected," Xi said on Wednesday in his speech at the opening ceremony for this year's dialogue, saying the two nations "stand to gain from cooperation and lose from confrontation".

"If we are in confrontation it will surely spell disaster for both countries and for the world," he said, adding the Pacific powers need to "break the old pattern of inevitable confrontation".

In a statement issued by the White House on Wednesday, President Obama said the US is committed to building a "new model" of relations with China that is defined by cooperation and the constructive management of differences. "We remain determined to ensure that cooperation defines the overall relationship," Obama said.

Actually, Beijing and Washington are already successfully working together on many issues, such as maintaining the stability of the Korean Peninsula, collaborating in international efforts to dismantle Syria's chemical weapons arsenal, and through a decade of difficult engagement with Iran. China's persistent stance of settling the Iranian nuclear issue peacefully has gained steam with the "6+1" negotiations.

As Beijing and Washington nurture their new model of a major-country relationship through its infancy, it is unrealistic to expect it to always be plain sailing. It is due to the challenges they face when it isn't going smoothly that the strategic dialogue is so important.

The author is a columnist with China.org.cn. For more information please visit: http://www.shenbo75.com/opinion/shendingli.htm

 

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