Secretary of State John Kerry speaks Thursday after talks at the U.S.-China Strategic and Economic Dialogue in Beijing. / Greg Baker, AP
BEIJING ‚?? U.S. and Chinese officials announced progress Thursday on climate change cooperation and other environmental projects, but two days of talks here brought no major breakthroughs on tougher issues including cybersecurity, China's currency and maritime disputes.
After meeting China's Communist Party leader Xi Jinping, U.S. Secretary of State John Kerry told reporters that the two countries "are committed to a new model of relations based on practical cooperation but also constructive management of differences."
On cybersecurity, especially China's alleged hacking of U.S. firms, those differences remain stark. Kerry said the two sides had a frank exchange on cyberhacking, which was hurting U.S. companies and having a "chilling effect on innovation and investment."
In response to a New York Times report on Chinese hackers breaking into federal employee files, Kerry said the attack "does not appear to have compromised sensitive material." He did not raise it with his counterparts, but said, "We've been clear on larger terms that this is an issue of concern."
China's foreign policy chief Yang Jiechi described cybersecurity as a "common threat facing all countries." The Chinese side "believes cyberspace should not become a tool for damaging the interests of other countries," he said. Articles in China's state media have previously accused the U.S. of seeking to establish the world's largest wire-tapping operation.
After the United States charged five Chinese military officers in May with hacking U.S. companies, China denied the charges and suspended a working group on cybersecurity. In a clear criticism of U.S. policy, Yang said Thursday that bilateral dialogue on cybersecurity would resume if the United States first "creates the right conditions."
Kerry and U.S. Treasury Secretary Jack Lew visited the Chinese capital for the annual China-U.S. Strategic and Economic Dialogue, now in its sixth round. The talks, also attended by Federal Reserve Chair Janet Yellen and three other Obama Cabinet members, alternate between the two countries but boast few major accomplishments to date.
Even where the U.S. and China do talk, significant changes remain elusive. Washington believes China keeps its yuan currency undervalued to help Chinese firms. After what he called a "frank, informative and useful dialogue," Lew said Beijing is now committed to reducing interventions in the foreign exchange market.
Lew said China is also preparing to increase transparency of its currency policy, "which will accelerate moves to a more market-based exchange rate." Such commitments "will help level the playing field," he said Thursday.
China's increasingly assertive stance on maritime claims, often far from its coastline, remains another thorny issue.
"China's actions in the South and East China Seas have generated concerns," Kerry said. Yang, the top diplomat, said China is "committed to upholding its maritime sovereignty and territorial rights in the South and East China Seas," and he urged the U.S. to take "an objective and impartial stance" on these issues.
Progress was achieved in setting a timetable for negotiation of a long-discussed Bilateral Investment Treaty, with talks set for early 2015 on the sectors Beijing wants to exclude.
"It's good to use economic engagement to push forward political and security relations," said Sun Zhe, director of the Center for Sino-U.S. Relations at Qinghua University in Beijing. "Both sides need to compromise a bit, as they pay too much attention to the power of the military," he said. "Rather than taking a more aggressive approach, it's time to reconsider, like (President) Nixon visiting China in 1972," Sun said.
The U.S. and China agreed to develop military-to-military cooperation, particularly on early warning and communication structures, Kerry said.
"I'm not confident about crises with the Philippines, Vietnam and Japan, but I'm confident we won't have a direct conflict with the United States," said Sun, the analyst.
Both China and the U.S. can cope with the multiple strains on their relationship, said Chinese Vice Premier Wang Yang, one of two Chinese co-chairs of this week's talks. The nations will strive to ensure "the giant ship of China-U.S. relations will continue to brave winds and rain, and continue to sail the right course," he said.
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