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China, US Discuss Economy, Cyber Security

by Shannon Van Sant July 10, 2014

The United States and China vowed to make progress on disagreements over cyber hacking and economic disputes as they wrapped up two days of high-level talks in Beijing.

The sixth round of the U.S-China Strategic and Economic Dialogue addressed issues ranging from climate change and cybersecurity to economic reforms and diplomatic tensions with China's neighbors.

U.S. Secretary of State John Kerry said Thursday he had a 'frank' discussion with his Chinese counterparts about cyber attacks, which he said are hurting American companies.

China rejects U.S. charges that it is stealing intellectual property from U.S. companies, instead accusing the U.S. of conducting its own espionage against Beijing.

Thursday's talks began with a breakfast that included entrepreneurs from the United States and China.

At a time when there are continuing tensions between the two nations, many see economic cooperation as a key opportunity.

Global economy

Addressing the gathering, U.S. Treasury Secretary Jack Lew said, "Today, strengthening the commercial relationships remains an important test ahead of us. It's a way to create economic growth and jobs in our two countries and it's a way to help drive the global economy forward.'

The U.S. economy shrank in the first quarter of 2014 by 2.9 percent. China's grew by 7.4 percent during the same period, but that is an 18 month low for the country.

After the 2008 financial crisis, huge Chinese government stimulus spending boosted its economy and helped lift the rest of the world. But on Wednesday, Beijing's finance minister said those spending measures are over, and it is up to the United States to drive the global economy.

Lew also said Chinese leaders committed during the talks to allow the market to play a bigger role in the value of the yuan currency, which the U.S. says is undervalued.

Also Thursday Kerry told the group of Chinese and American business leaders that it is crucial both countries manage their differences on national security and economic issues.

'China and the United States represent the greatest economic alliance, trading partnership in the history of humankind. And it is only going to grow,' Kerry said.

The meeting served as an opportunity for the American and Chinese entrepreneurs to discuss their grievances and difficulties in doing business with one another.

Access to markets

U.S. companies have complained about a variety of issues, including restricted access to Chinese markets, intellectual property theft, and the low value of China's currency, which gives Chinese exporters an advantage.

Stressing that business is the 'backbone' of the U.S.-China economic relationship, State Councilor Yang Jiechi said Beijing will work to address the concerns.

'I believe all departments from our two countries' governments will pay high attention to the proposals and suggestions raised by all entrepreneurs today,' Yang said.

Later Thursday, Kerry said much of the discussion focused on ideas rather than immediate action.

U.S. officials hope what was agreed to this week will start to take shape before meetings of the Asia-Pacific Economic Cooperation forum this fall.

Chinese Ministry of Foreign Affairs spokesman Hong Lei also highlighted cooperation with the U.S. at the close of the talks.

Kerry remarked that academic freedoms and independent news media are key issues in the relationship between Washington and Beijing.

'It's a partnership that has the potential to be even stronger when we understand that academic freedom and free press are not barriers to greater exchanges between our people - they are the drivers of a better understanding of those exchanges,' Kerry said.

'The story of U.S.-China relations really can be one of genuine cooperation, and frankly a spectacular accomplishment,' he added.

Finding economic balance

During the annual talks, Beijing officials have insisted they are trying to find the right balance on advancing economic reforms, including exchange rate liberalization and market access.

The two days of talks are also focusing on other disputes, such as China's maritime disputes with its neighbors and U.S. concerns over China's human rights record.

At the first day of the dialogue Wednesday, Chinese President Xi Jinping emphasized cooperating, saying confrontation between the U.S. and China would 'definitely be a disaster.'

Kerry said the United States and China have the ability to find common ground. He said Washington is not trying to contain China, but hopes it becomes 'peaceful, stable and prosperous.'

​​Meanwhile, a writer who advocates human rights in Tibet says authorities have placed her and her husband under house arrest in Beijing for Kerry's visit.

Tsering Woeser was kept from attending a dinner to which she was invited by the U.S. embassy.

Woeser was given an International Women of Courage Award by the State Department last year. State Department spokeswoman Jen Psaki said officials are concerned by her reported house arrest and are looking into the matter.