BEIJING, Dec. 3 -- The Sino-US Strategic Economic Dialogue (SED) will start its fifth two-day session tomorrow in Beijing, with all eyes on how the two major economies will face the global financial crisis together even as Washington prepares for a handover of power to the Obama administration next month.

    Initiated by President Hu Jintao and his US counterpart George W. Bush in 2006, the semiannual dialogue has become a major channel for policymakers in the two countries to maintain frequent contact and enhance mutual trust.

    The two sides have reached consensus on nearly 150 areas during previous SED sessions, covering issues such as macroeconomic policy, environmental protection and energy efficiency, Assistant Minister of Finance Zhu Guangyao said last week during a news briefing.

    Analysts and businesspeople are holding high expectations of the coming dialogue, but the impressive achievements of previous sessions have not fully satisfied critics in the US who say the process has failed to resolve the most important issue on the table: getting China to appreciate the yuan.

    "The incoming Obama administration may want to put concerns over the yuan exchange rate high on the agenda to calm some critics in its party if he decides to continue the dialogue," Sun Zhe, director of the Center for Sino-US Relations at Tsinghua University, told Caijing magazine earlier last month.

    "This is an issue that China and US will face off sooner or later, putting it on the agenda may even make it easier for the two sides to conduct the dialogue," Sun said.

    With the inauguration of the Obama administration a month away, observers say how the Republican Bush-initiated SED mechanism will fare under the new Democrat-Obama leadership - a mechanism now seen by many as a barometer of Sino-US relations - will be under increasing scrutiny.

    The shared interests and increasingly important bilateral trade and economic relations between China and the US mean that dialogues like the SED should be continued, analysts said.

    The ongoing global financial crisis has made such a platform even more important as the cooperation between the two countries - the US being the world's largest developed economy and China its largest developing one - are critical to counter the economic slowdown, they said.

    "It is in the fundamental interests of the two countries to continue the dialogue, regardless of who the US president is," said Shen Dingli, director of the Center for American Studies at the Shanghai-based Fudan University.

    The US needs China's cooperation to tackle the current financial crisis as the latter holds a large amount of foreign exchange reserves, Shen said.

    "Our recent close and frequent communication and cooperation, as we address the challenges in the financial markets, are tangible examples of the power and utility of a Strategic Economic Dialogue based on mutual trust," US Treasury Secretary Henry Paulson, who will head the US delegation to the 5th SED, said last month.

    "This framework provides the next administration a critically important platform for US economic engagement with China," Paulson said.

    Paulson is expected to elaborate his views on the dialogue mechanism in a press conference this morning in Washington.

    "I hope Henry Paulson can convince Obama to continue the SED, that is very important," said James McGregor, chairman and CEO of JL McGregor & Company, a China-focused, China-based independent research firm.

    "The world is depending on China's growth," the former CEO of Dow Jones & Company in China said.

    "Obama's chief China advisor is an experienced China hand, he understands that," McGregor said, referring to Jeffrey Bader.

    While researchers agree the Obama administration will continue the SED framework, they say it is likely the name, contents or focus of the dialogue may be modified.

    "We (The American Chamber of Commerce in China) anticipate that the United States and China will continue to hold high-level discussions concerning economic issues of importance to the two economies. It is therefore likely that a dialogue of some sort will continue, although it may be characterized or titled somewhat differently," said James Zimmerman, chairman of the American Chamber of Commerce in China.

    "A key element (of the SED) is that it allows for a high-level engagement on issues of importance to both the US and China. Nothing can be achieved without dialogue and the sharing of dialogue and points of view," Zimmerman said.

    China will discuss possible changes to the dialogue's name and contents with the Obama administration, Assistant Minister of Finance Zhu said last week during a news briefing.

    The 5th SED is also expected to discuss other issues of macroeconomic policy, the international financial crisis, energy, environment, trade and investment.

    "We strongly believe that this mechanism (SED) should and will carry on (under the new US administration)," Zhu said.

    Fudan University's Shen said the Obama government will also "very likely" elevate the strategic dialogue from the current vice-premier to premier level.

    The possible elevation of the dialogue level, Shen said, is of great significance, as it will make the decision-making process swifter, hence raising its efficiency.

    "Obama was elected because American people think he is a man of far-sightedness and will make decisions that are in their interests," Shen said.

    "I personally know many of Obama's China advisors and I believe they will do it," he said.

    The name of the SED may also be changed as every politician is inclined to credit himself with some legacy, Shen said.

    Similarly, some say the topics and even dialogue itself should be conducted in an "evolving manner" to stay abreast of the rapidly growing Sino-US ties.

    "Given that the relationship between the US and China is constantly growing and evolving, the dialogue and its topics should be managed in a manner that addresses the key challenges and issues affecting the US-China relationship including, but not limited to, environmental and energy cooperation, market access, transparency, and economic recovery and growth," Zimmerman said.

    (Source: China Daily)

Paulson says engagement with China yields results 


    WASHINGTON, Dec. 2 (Xinhua) -- U.S. Treasury Secretary Henry Paulson said Tuesday that the engagement with China through the Strategic Economic Dialogue (SED) has helped yield many results

    "We have learned that engagement works, that engagement can help achieve meaningful, tangible results that would not have been possible otherwise," Paulson told a Washington forum ahead of the fifth SED in Beijing this week.

U.S. diplomat: SED importance stressed in presidential transition 


    BEIJING, Dec. 2 (Xinhua) -- U.S. Assistant Secretary of State Daniel S. Sullivan said on Tuesday that the Obama team has already been briefed on the importance of the China-U.S. Strategic Economic Dialogue (SED).

    "The transition between the Bush administration and the Obama administration is very closely coordinated," he told reporters here at the U.S.-China Conference on Innovation and Commercialization.

FM spokesman: China hopes for successful economic dialogue with U.S.

    BEIJING, Dec. 2 (Xinhua) -- China on Tuesday voiced hope of success for the Strategic Economic Dialogue (SED) with the United States later this week, saying that both sides will make efforts for this goal.

    "The SED is an important mechanism initiated by state leaders of both countries to promote the healthy and stable development of Sino-U.S. economic relations. It is proven to promote in-depth discussions on some strategic, comprehensive issues," foreign Ministry spokesman Liu Jianchao told a regular press conference.