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Keeping US-China channels open

Published on Jul 14, 2014 5:55 AM

WITH tensions running high between the United States and China, the world can take some comfort that the major powers are continuing with their annual Strategic and Economic Dialogue, even if there was little to show from the latest one held in Beijing last week. Such are the dispositions that a Hong Kong newspaper declared that "the high-level talks are less about outcomes than conversation and on that score, they lived up to expectations". That will have to do for now but one would expect more going forward given the pressing issues at hand.

The major powers did little to bridge a yawning gulf on the thorny issues of maritime disputes and cyber spying. The open verbal sparring at the end of the dialogue said it all. While insisting that the US did not take sides, US Secretary of State John Kerry told a news conference that it opposed any assertive behaviour in the disputed waters. Meanwhile, top diplomat Yang Jiechi said "the Chinese side will continue to steadfastly protect its territorial and maritime rights". The US remained committed to the alliance system in the Asia-Pacific but China roundly condemned it. So, what has changed?

There was no compromise on the issue of cyber spying either. Earlier, the Chinese had responded to the US Justice Department's symbolic indictment of five Chinese military officers for alleged espionage against US companies by pulling out of a cyber security working group. At the dialogue, they brusquely refused a US request to restart it. That was a poor judgment call under the circumstances.

Yet, things were not so dire. Both sides were clearly eager to highlight what little progress that was made in other areas. For example, US Treasury Secretary Jack Lew, who has been pushing for the Chinese to move towards a market exchange rate for the yuan, described as a "big change" China's commitment at the dialogue to reduce currency intervention where conditions allow, although some observers saw nothing new in this.

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