If a question were asked of what China’s most important foreign relations are, most Chinese would name Sino-American ties among their sure answers. Indeed, this relationship is of crucial importance to both nations, as it is closely related to the basic interests of the two sides and determines, in one way or another, the course of the changing scenarios of contemporary international relations.
Of overall China-U.S. relations, bilateral trade and economic ties have grown in significance in recent years. Maintaining a strong relationship in these areas is key to sustaining domestic and global economic growth and makes up a cornerstone for bettering bilateral relations in a broader sense and on a larger scale. Another reason for this growing significance may be attributed to the complexity and sensi-
tivity of this relationship: fast growing and mutually beneficial on one hand but creating controversies and frictions on the other. Hence the launch of the high-level China-U.S. strategic economic dialogue (SED), inaugurated in Beijing last December and scheduled for a second round in Washington on May 23-24, a working mechanism widely regarded as an effective way of enhancing understanding, spotting convergence of mutual interests and seeking common ground.
Many Chinese analysts expect the inclusion of some identical or similar topics in the upcoming round of SED, as in the first round, such as trade imbalance, intellectual property right (IPR) protection, the appreciation of the renminbi and further market deregulations, mostly seen by America as barriers to furthering bilateral trade and economic cooperation. While these issues invariably lead to discord, they are often biased or misinterpreted. For instance, some U.S. lawmakers have pressured China to appreciate its currency as a way of easing America’s trade deficit, disregarding the fact that the growing imbalance is largely a result of global industrial readjustments; others have insisted that China further opens local financial and other markets, neglecting the country’s painstaking efforts to honor its WTO commitments in these areas, and without taking into consideration the potential dangers for some local industries when the market is fully opened to outsiders. These are deemed unfair and even impractical for developing nations like China.
As a country in historical transition, China is faced with many difficulties and problems in its economic takeoff, including IPR protection and worsening environment. It not only needs foreign capital, advanced technology and managerial expertise, but also requires a peaceful and win-win environment for its external economic relations. For these reasons, the country has done what is possible to ease its disputes with foreign countries, including the U.S., as in the cases of concluding $16.21 billion worth of government procurement contracts last April, and the forthcoming dispatch of another 100-plus member business delegation to sign up lucrative purchase deals in the United States.
With highly complementary economic structures and reciprocal resource allocations, both China and the U.S. have gained huge benefits from bilateral business contacts through the past decades. A sound and ever improving trade and economic relationship is in keeping with the mutual aspirations and interests of both sides, while antagonism will cause possible damage to their respective economies, or even put global economic development at potential risk.
In a recent telephone conversation between Chinese President Hu Jintao and U.S. President George W. Bush, both leaders acknowledged the positive impact of the first SED meeting. Let us hope round two can be crowned with equal success.