Strategic dialogue a good framework for better China-US ties: academic
Updated
Despite the general positive tone of the US-China dialogue, observers say the agreement signed was short on specifics.
The formal session of the two-day talks were held almost entirely behind closed doors. Connect Asia spoke to Professor Donald Hellmann at the University of Washington in America about the importance of the talks.
Presenter: Sen Lam
Speakers: Professor Donald Hellmann at the University of Washington in America
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HELLMANN: Well apart from the obvious usefulness of just communicating, these exchanges which were broadened by the Obama administration to include strategic as well as economic issues, will serve much the way APEC served as a forum for setting at least an agenda for action in the Pacific - APEC doing so in the early 1990s in which Australia played a major part - But it's clearly a transitional operation, that is why the specifics were not there. It's important, but the basic institutions, like the IMF, the World Bank, all have to be fundamentally restructured, to accommodate the rise of China and Asia more generally.
LAM: Do you think it might make things easier, the fact that it is a bilateral forum, that they can talk to each other, that the agenda is not as broad as APEC?
HELLMAN: I think that is useful. The good news is that it will allow movement toward specific arrangements more readily. It's also very fashionable in Washington and the United States more generally, to see the world becoming a bi-polar world, much like the Cold War with China and the United States being the two poles. My personal opinion is that while there are advantages for solving immediate problems in bilateral negotiations, that the challenges are really broader, not just Pacific wide, but probably globally.
LAM: Well two major issues, of course, were currencies and climate change. Let's begin with the currencies first. What are the challenges there?
HELLMAN: Well, clearly the Chinese like the Japanese did in the early 1960s and 70s, have kept the yuan undervalued as part of an export led strategy for growth. This is driven by very practical, short term considerations. The kind of things discussed in these meetings go to a much broader, more strategic one and so this was really just a sounding board for that. Secondly, the United States is now in a very awkward and weakened position and so, the currency issue is no longer just simply what Beijing wants to do, but how successful can the United States be in dealing with its own problem of the dollar, while we're inflating the economy to get out of the recession.
LAM: Indeed, it would seem to be that each side wants the other to do exactly the same thing. The US wants the yuan to rise and then the Chinese don't want the dollar to slide too far?
HELLMAN: That's an excellent point. The interdependence of the two economies is really substantial and were the dollar to collapse, China would be one of the biggest if not the biggest loser and similarly, the United States cannot afford to be seen as being the villain that pulls down the Chinese economy because were they to, were this arrangement to break, we would suffer even more, as would others.
