Chinese President Xi Jinping (習近平) said China and the US needed to trust each other more as both sides sought to minimize tensions over the South China Sea at the opening of the US-China Strategic and Economic Dialogue in Beijing yesterday.
“China and the US need to increase mutual trust,” Xi said at the opening of the annual strategic dialogue, calling for redoubling of efforts for the two powers to manage conflicts and avoid “strategic misjudgment.”
“Some disputes may not be resolved for the time being,” he said, but both sides should take a “pragmatic and constructive” attitude towards those issues.
“The vast Pacific should be a stage for cooperation, not an area for competition,” he said.
US Secretary of State John Kerry called for a “diplomatic solution” to the problem.
“We are looking for a peaceful resolution to the dispute in the South China Sea and oppose any country resolving claims through unilateral action”, he said, referring to China’s increasingly aggressive expansion in the area.
On economic issues, US Treasury Secretary Jack Lew in prepared remarks said the US supports China’s efforts to cut excess industrial capacity and encourages its use of fiscal and lending policies to strengthen consumer demand as part of its economic transition.
“Excess capacity has a distorting and damaging effect on global markets,” Lew said. “Implementing policies to substantially reduce production in a range of sectors suffering from overcapacity, including steel and aluminum, is critical to the function and stability of international markets.”
Lew said the two countries would discuss ways to promote sustainable and balanced growth and improve financial sector function and stability at the annual talks.
Xi said that China would continue with its structural reforms and improve its openness to the outside.
“We have full confidence that China can achieve its goals of economic and social development,” Xi said.
He also said it was important to conclude a bilateral investment treaty with the US.
“We must make our best efforts to achieve a mutually beneficial China-US investment agreement at an early date and create new bright spots in bilateral economic and trade cooperation,” Xi said.
Chinese Vice Premier Wang Yang (汪洋) said that China would next week submit its “negative list” offer of sectors that would remain off-limits to US investment in a US-China bilateral investment treaty (BIT), Chinese Vice Premier Wang Yang (汪洋) said.
US officials have said a negative list that greatly reduces the number of off-limits sectors is critical to reaching a deal.
Lew also urged China to remain clear in its communications about foreign-exchange policy and implementation.
“A market-determined exchange rate with two-way flexibility will help foster a more efficient allocation of capital,” he said.
Wang highlighted the difficulties arising from the rising interest-rate trend in the US.
“Expectations on interest rate rises by the US Federal Reserve have increased uncertainties on economic growth of emerging market economies,” Wang said.
Additional reporting by Reuters
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