Chinese Vice-Premier Wang Yang (2nd R), Chinese State Councilor Yang Jiechi (1st L), US Secretary of State John Kerry (2nd L) and US Treasury Secretary Jacob Lew pose for photos at Mount Vernon, the home of first US President George Washington, in Virginia, the United States, on June 22, 2015. [Photo/Xinhua]

Thematic frictions, structural tensions

During the Obama era, the S&ED has illustrated all vital aspects of the White House's China policy, including the "Pivot to Asia," efforts to consolidate a "new model of cooperation," various levels of bilateral and multilateral engagement, technical and ideological views on visa policy and public diplomacy.

On security issues, the key topics involve the U.S.-China military-to-military relationship, military activities on both sides, and maritime disputes in the region. These topics also include the Middle East, including the continued hostilities in Syria and sanctions against Iran.

In turn, the Sino-U.S. economic issues range from the bilateral economic relationship and global rebalancing to bilateral trade relations and currency policies, which are reflected in U.S. concerns about China's holdings of U.S. Treasuries, and bilateral WTO disputes.

However, with currency reforms, the Chinese renminbi has appreciated 35 percent against the U.S. dollar over the past decade and China's currency is "no longer undervalued," as the IMF has reported.

More recently, there have been increasing efforts toward the U.S.-China Bilateral Investment Treaty (BIT), especially as Chinese investment in the United States has taken off and both nations are looking more extensively into the enforcement of Intellectual Property Rights (IPRs).

The bright spots in the bilateral cooperation are climate change and energy cooperation.

Like in the past, the seventh dialogue also reflected the divergent policy approaches of China and the United States, which explain much of the current thematic frictions and underlying structural tensions in the dialogue.

While Beijing emphasizes a medium-term perspective on bilateral relations, Washington is driven by shorter-term pressures and early positioning for the 2016 presidential election. And while Beijing is accelerating regional economic integration, Washington's "Pivot to Asia" is fueled mainly by security concerns.

Nevertheless, there should be no divergence from the bottom line: America and China must reconcile their differences in ways that promote continued economic dynamism and lower tensions in the region.

Dr Dan Steinbock is a columnist with China.org.cn. For more information please visit: http://www.shenbo75.com/opinion/DanSteinbock.htm

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