Finger-pointing must stop, Wu Yi tells US

PUBLISHED : Thursday, 13 December, 2007, 12:00am
UPDATED : Thursday, 13 December, 2007, 12:00am

Importance of co-operation, not confrontation, emphasised at opening of dialogue

Vice-premier Wu Yi and US Treasury Secretary Henry Paulson opened the Third China-US Strategic Economic Dialogue in Beijing yesterday amid rising concerns over food and product safety and protectionist sentiments.

Flanked by an impressive array of ministers and secretaries, the two chief negotiators - having dealt with each other on numerous occasions - kicked off the half-yearly dialogue with friendly handshakes but went straight to problems in trade relations.

Ms Wu, China's 'Iron Lady', probably in her last formal negotiation with Mr Paulson, offered three points of advice to improve ties.

She stressed the importance of dialogue in resolving problems that would naturally arise in the course of rapidly growing business ties, which are key to overall Sino-US relations.

'The history of China-US business relations has repeatedly shown us that it is dialogue and consultation, not confrontation and finger-pointing, that have enabled the relations to grow,' Ms Wu said.

She criticised the politicising of trade issues and reiterated concerns over the large number of protectionist bills directed against China by the US Congress.

Briefing media after the talks, Finance Minister Xie Xuren said China and the US should focus on co-operation rather than confrontation in resolving their economic disputes and must not politicise trade issues for short-term gain.

'Trade must not be politicised,' Mr Xie said.

Ms Wu also called for greater co-operation in ensuring product quality and food safety, pointing out that the US 'should also assume its due share of responsibility'.

Mr Paulson highlighted food and product safety as prominent concerns.

'As our economic ties increase, Chinese and American citizens must have confidence in the goods they buy,' Mr Paulson said.

He also said a more flexible exchange rate and more open Chinese financial sector were crucial for China's macro-economic stability and the increasingly inter-dependent bilateral ties.

'Whereas trade was once largely a source of stability in US-China relations, it has recently become a source of tension, and not only because of safety concerns,' Mr Paulson said. 'We must resist attempts to reduce transparency or increase regulatory obstacles in order to protect domestic industries.'

Mr Xie said both sides agreed on the need to prevent the rise of economic nationalism and protectionist sentiments.

The talks also focused on opportunities and challenges brought about by the fast pace of economic globalisation, of which both economies, as the world's largest developed economy and the largest developing one, were the biggest beneficiaries, Mr Xie said.

Meanwhile, Mr Xie said China would ensure its new sovereign wealth fund was effectively supervised and respected local laws in countries where it operated, amid rising concern in US and European nations.

China set up its fund, the China Investment Corp, in September with an initial US$200 billion to manage. Two-thirds of the money is earmarked for domestic investments.

China and the US will also announce a 10-year plan on energy and environmental protection, according to Zhang Xiaoqiang, vice-chairman of the National Development and Reform Commission.

He said: 'Vice-premier Wu Yi mentioned that in the third [Strategic Economic Dialogue], both sides will formulate an energy and environment protection 10-year plan. This is really a great achievement.'

Mr Zhang said consensus was reached on issues such as environmental protection, improving energy efficiency, and policy co-operation and how to develop new and clean energy.

Additional reporting by Cary Huang and Al Guo