Results of the 2nd Meeting of the U.S.-China S&ED

The U.S. and China have concluded their second meeting of the U.S. and China Strategic and Economic Dialogue, which occurred on May 24-25, 2010 in Beijing.

Treasury Secretary Geithner, who headed up the economic track of the talks for the U.S., stated that American exports to China are growing much more rapidly than exports to the rest of the world. Compared to the first quarter of 2009, U.S. exports to China went up by almost 50 percent while exports to the rest of the world went up by 20 percent. Geithner stated that this development demonstrates the strength of the American economy, as well as the importance of the process of rebalancing underway in China to promote stronger growth in domestic demand.

Geithner outlined some of the trade-related results of this second meeting as follows:

Indigenous Innovation Policies

China has revised certain aspects of its product accreditation system, such as the requirement that products be patented or trademarked in China.

China has also agreed to launch expert and high-level bilateral innovation discussions over the coming weeks and months with all relevant U.S. and Chinese agencies and to take into account the results of these discussions in formulating and implementing its innovation measures. For the U.S., this dialogue will be led by USTR Kirk, Commerce Secretary Locke, and Science and Technology Director Holdren.

In addition, China and the United States committed to innovation policies consistent with strong principles, including nondiscrimination, intellectual property rights protection, market competition, and no government interference in technology transfer.

Government Procurement Agreement

China had committed to submit a revised offer on joining the WTO Agreement on Government Procurement by July 2010, and issued draft regulations for public comment containing a 50% local content provision.

Foreign Investment in Services, High-Tech Goods, High-End Manufacturing

China has also committed to reduce barriers to foreign investment in services, high-technology goods, high-end manufacturing, and energy saving products and facilitate foreign investment by decentralizing review and approval processes.

Exchange Rate Reform

China's leaders have recognized that reform of the exchange rate is an important part of their broader reform agenda. Allowing the exchange rate to reflect market forces is important not just to give China the flexibility necessary to sustain more balanced economic growth with low inflation but also to reinforce incentives for China's private sector to shift resources to more productive higher value added activities that will be important to future growth.

The U.S. will continue to have intensive discussions with China on this in the run-up to the G-20 Leaders’ summit.

U.S. Soybean Exports

China and the U.S. have agreed to strengthen cooperation on inspections of soybeans to ensure the smooth flow of U.S. soybean exports.

Economic Reform in China

China’s President Hu has committed to the process of economic reforms to expand domestic demand and increase household consumption; expand market access in keeping with established international economic and trading rules, and advance trade and investment liberalization.

Trade Finance for Small and Medium-Sized Enterprises, Assistance for Haiti

The U.S. and China are building a network of cooperative arrangements on a range of goals, from boosting access to trade finance facilities for small and medium-sized enterprises to fighting money laundering and terrorist financing, from strengthened cooperation on financial reforms to helping Haiti repair the damage from its devastating earthquake.

(See ITT’s Online Archives or 05/20/10 news, 10052052, for BP summary stating U.S. to address China’s Indigenous Innovation policies at the S&ED.

See ITT’s Online Archives or 05/17/10 news, 10051764, for BP summary of U.S.- China Business Council’s recommended changes to China’s Indigenous Innovation policies.)

U.S. S&ED Fact Sheet is available here.