U.S.-China talks end without apparent accord on key issues

McClatchy NewspapersMay 25, 2010 

BEIJING — U.S. and Chinese officials signed accords on trade finance, China's gas reserves and credit arrangements Tuesday but gave no indication of any progress on vital strategic issues involving the rising tensions on the Korean Peninsula and the value of China's currency.

The U.S. and Chinese delegations said the two days of high-level talks had been substantive, however. The standoff between South and North Korea continued to escalate Tuesday, but it was unclear whether Beijing, the only friend of Kim Jong Il's despotic regime, would persuade Pyongyang to show restraint.

After an investigation concluded that North Korea had sunk a South Korean warship earlier this year, South Korea on Monday cut most trade ties with its neighbor and vowed to defend itself in the event of further provocations. North Korea said Tuesday that it was freezing ties with the South and breaking all communications.

Also left unresolved, at least in public, was whether China will continue to support a draft plan for new sanctions against Iran in the U.N. Security Council, where China has a veto. Washington views the sanctions as a key move toward discouraging an Iranian nuclear weapons program.

Finally, there was the issue of China's undervalued currency. Will Beijing allow the yuan to appreciate, and if so, when and by how much? The relatively low exchange rate of the yuan to the dollar, kept at about 6.8 by the government, has led to global trade imbalances, many economists contend.

Both sides at the meetings, called the Strategic and Economic Dialogue, said that all those matters were being discussed in great detail. While the Americans and Chinese acknowledged that they hadn't agreed on everything — at times not even "the perception of the issue," Secretary of State Hillary Clinton said — officials took great pains to say the fact that the conversations had taken place was a sign of progress.

At the end of the day, however, it wasn't clear what, if anything, the talks had accomplished.

Chinese leaders have remained vague, in public at least, about what steps they might or might not take on the crucial issues. State Councilor Dai Bingguo spoke in his closing remarks Tuesday of developing a "mutually beneficial and win-win relationship." On Korea, though, he only gave the official line that Beijing hopes that all concerned will "calmly and appropriately handle the issue."

At a subsequent news conference, Clinton said her talks with the Chinese about Korea began Sunday night and lasted through Tuesday.

“The Chinese understand the gravity of this situation,” said Clinton, who's traveling to Seoul on Wednesday. President Hu Jintao was vague on the question of China's currency in his remarks Monday. "China will continue to steadily advance the reform of the ... exchange rate under the principle of independent decision-making, controllability and gradual progress."

U.S. Treasury Secretary Timothy Geithner said Tuesday that he welcomed the fact that China's leaders "have recognized that reform of the exchange rate mechanism is an important part of their broader reform agenda," but it wasn't clear whether he was prodding the Chinese, reporting progress or perhaps still trying to figure it out himself.

He added that: "This is, of course, China's choice."

Amid discussion of some of the world's most important issues, Clinton took a moment Tuesday to razz her colleague about his coiffure.

During an interview with Hong Kong-based Phoenix TV along with Geithner, the two were shown a photograph of themselves together and asked what they were talking about at the time.

"I think I was complimenting him on his hair," Clinton said, laughing at Geithner, who's retained his youthful profile through recent economic turmoil. "He always looks so good, you know? It's maddening. It takes me so much longer, and it doesn't even look as good."

The lighter touch was soft diplomacy — spending the last day of a summit reaching out to the local population with speeches and stories that make a more personal connection than a news conference affords. It also underlined the fact that there wasn't big news to announce on more crucial topics.

After joking with Geithner about his hair and discussing more serious issues, Clinton talked about playing volleyball in her younger days.

During an announcement ceremony for student exchanges between China and the United States, Clinton watched international students perform in traditional Peking opera outfits, and then heard a Chinese soprano sing "Summertime." Later, she told Chinese state TV that she considers "Sino-U.S. relationships among the most important in the world" and then had a chat about wedding shower plans for her daughter, Chelsea.

Bringing the conversation back to the summit, Clinton pointed out that technology was no substitute "for person-to-person meetings ... looking at somebody, letting them look at you, gauging what kind of person they are."

"So we have been working hard and making progress," Clinton said. "We have a long way to go."


South Korea condemns North over torpedoing, halts trade

Obama administration officials to prod China anew on currency

China's role grows in debate over Iran sanctions

McClatchy Newspapers 2010

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