Global financial crisis to dominate US-China Strategic Economic Dialogue
By Channel NewsAsia's East Asia Bureau Chief Maria Siow | Posted: 04 December 2008 0019 hrs

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BEIJING : Chinese and US officials will meet in Beijing on Thursday for bilateral trade talks.

To be spearheaded by US Treasury Secretary Henry Paulson and Chinese Vice-Premier Wang Qishan, the global financial crisis is likely to dominate the Strategic Economic Dialogue.

Other issues include product safety, and the revaluation of the Chinese currency.

When US and Chinese officials last met in June to deepen economic cooperation, the world seemed like a less treacherous place. But with the onslaught of the global financial crisis, both sides are scrambling to counter the fallout.

The US is officially in a recession, while China faces the prospect of a slowdown.

Washington is likely to press Beijing to allow the Chinese currency to rise further against the US dollar.

The US and other major trading partners have long complained that the yuan is undervalued, which makes Chinese exports less expensive.

The fifth meeting to be held since 2006, the Strategic Economic Dialogue is also expected to touch on environmental issues.

Both sides might agree on an action plan for air quality, and even possibly launch an initiative to establish eco-city partnerships among their cities.

Even so, no major economic breakthroughs are expected.

Jin Canrong, deputy director, Centre for American Studies, Renmin University, said: "I think this time, if they can get (a) more detailed agreement on energy, environment (and) investment protection, this dialogue will have some far reaching impact and will help this mechanism dialogue be resumed in another name under the new administration."

The dialogue allows issues relating to the world's most important economic relationship to be discussed.

Paulson has made it clear that the session must produce short-term results in order to win continued support. This seems to suggest that the dialogue might not be continued under the Obama administration.

But whether it is known as the Strategic Economic Dialogue or by any other name, it is still as imperative - if not more so - for both sides to continue working together to tackle common issues and challenges. - CNA/ms