US-China high-level strategic and economic dialogue begins

The annual high-level strategic and economic dialogue between US and China began here today with Chinese President Hu Jintao calling for a ''new type of relationship'' between the two countries to break the traditional belief that big powers only have conflicts.

Inaugurating the two-day talks attended among others by US Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner, Hu said China and US should break traditional belief that big powers will enter into conflicts and seek new ways to develop ties.

"Whatever changes may take place in the world and no matter how the domestic situations in our two countries may evolve, China and US should be firmly committed to advancing the cooperative partnership and build a new type of relations between major countries that is reassuring to peoples from both the countries and the world," Hu said.
The two countries should think creatively to build such a new type of relationship, he said.

The dialogue began amid controversy over the blind Chinese activist Chen Guangcheng seeking shelter in the US Embassy here as well as tensions between Philippines and China over disputed islands.

US officials escorted Chen out to a hospital yesterday. China demanded an apology for the embassy for sheltering him.

Also Philippines and Chinese naval vessels are currently patrolling the disputed waters of an island in the South China Sea in a stand off and Manila sought Washington's assistance to counter Beijing's moves.

In his speech, Hu recalled how former US President Richard Nixon's visit to Beijing changed the bilateral ties 40 years ago and said that both sides need to advance the relationship with the times with new thinking, policies and actions."We should, through creative thinking and concrete steps, prove that the traditional belief that big powers are bound to enter into confrontation and conflicts is wrong and seek new ways of developing relations between major countries in the era of economic globalization," Hu said.

Speaking that inaugural meeting of the economic dialogue, Geithner said US exports to China have doubled since early 2009, roughly twice as much as its exports to the rest of the world. The Chinese investment in the United States has increased five-fold from 2005-2010.

US has taken note that China has committed to provide greater protection and enforcement for US intellectual property rights and to improve market access for US companies, he said.

China also continued to move toward a more market oriented exchange rate system and to reduce controls on capital movements, and the renminbi has appreciated by approximately 13 per cent against the US dollar in real terms over the past two years.
Both China and the United States have made progress reducing our external trade imbalances, he said.

"Our challenge now is to build on that progress. I want to highlight our main objectives for these meetings," he said.

The discussions would cover risks to the global economy and US-China cooperation to deal with EU debt crisis as well as well as the stand off over Iran nuclear issue.
"We will explore the main challenges ahead in our respective efforts to reform our financial systems and to improve global cooperation on financial reforms," he said.
On the currency issue, he said: "a stronger, more market- determined renminbi will help reinforce China’s reform objectives of moving to higher value-added production, reforming the financial system, and encouraging domestic demand. It will provide China the independence and flexibility to respond to future changes in growth and inflation."