U.S. to Address China’s Indigenous Innovation Policies at S&ED Meeting

U.S. and Chinese officials will meet in Beijing during May 25 - 26, 2010 for the second meeting of the Strategic and Economic Dialogue.

(The first meeting of the S&ED was held in Washington, D.C. on July 27-28, 2009, and addressed a wide range of bilateral, regional and global strategic and economic interests.)

More Than 200 U.S. Officials to Attend

State Department officials state that this is one of the largest groups of cabinet and subcabinet officials from the U.S. ever to visit China. Almost 200 officials, including 16 cabinet heads, will be in attendance. The contingent is being led by Treasury Secretary Geithner, who heads up the economic track of the talks, and Secretary of State Clinton, who is in charge of the strategic track.

U.S. Officials to Address China’s Draft Indigenous Innovation Policies, Etc.

During a May 18, 2010 visit to the Port of Tacoma in Washington State, Secretary Geithner stated that American companies are very concerned about China’s proposed program on "indigenous innovation", where the Chinese government would compile a list of what qualifies as innovative products, and provide advantages to the companies that make them. Those benefits would include preferential treatment in government purchases.

Products exported to China from the U.S. might not be eligible for those benefits; even products produced by American firms that operate within China may not make the cut. Geithner said that this approach has the potential to discriminate against foreign-made products and could disadvantage American exporters and investors as they compete with Chinese firms. He noted that the Chinese government has taken some steps to address these concerns, but there was more work to do.

Another challenge of the talks is to ensure that China does more to protect intellectual property rights, and reduces subsidies and other preferences to domestic companies.

The valuation of China’s yuan currency is also expected to be discussed. The Treasury Department delayed its report to Congress on the international economic and exchange rate policies of major U.S. trading partners, including China, until after this S&ED and other meetings.

(See ITT’s Online Archives or 05/17/10 news, 10051730, for BP summary of U.S.-China Business Council’s recommended changes to China’s Indigenous Innovation Policies.

See ITT’s Online Archives or 07/16/09 news, 09071620, for information on the first S&ED meeting.

See ITT’s Online Archives or 04/05/10 news, 10040505, for BP summary on delay of exchange rate policies report.)

Treasury press release (dated 05/19/10) available at 5/19 http://www.ustreas.gov/press/releases/tg704.htm

State Dept press releases (dated 05/18/10 and 05/19/10) available at http://www.state.gov/p/eap/rls/rm/2010/05/142018.htm, http://www.state.gov/p/eap/rls/rm/2010/05/142015.htm, and 5/18 http://www.state.gov/r/pa/prs/ps/2010/05/141980.htm