The latest round in the high-level strategic economic dialogue between China and the United States has produced solid results but no major breakthroughs. Both sides described the two days of trade talks, which concluded yesterday, as fruitful and constructive. That, in itself, is an achievement, given the tensions that exist.
Such talks were never meant to produce major policy changes. Their nature is such that no advances could realistically be achieved with the real stumbling blocks in Sino-US trade relations - the pace of appreciation of the yuan and Beijing's expanding trade surplus. Both sides, in the end, sidestepped these most contentious issues.
The smaller steps taken will help build bridges and much-needed trust. The agreements reached this week will serve well as the basis for future talks that will eventually have to tackle the more serious trade disputes. This may be the most important result of the third, and latest, round of meetings in the strategic dialogue. Both sides can now point to it as a success. It shows the value of patient, high-level talks on the basis of mutual respect rather than recrimination and resentment. There are dozens of bills currently before the US Congress seeking to penalise China for allegedly unfair trade practices. China-bashing is a blood sport among US presidential candidates and their criticisms will only intensify in the coming election year. That the negotiators on both sides - led by retiring Vice-Premier Wu Yi and US Treasury chief Henry Paulson - managed to reach a host of agreements is a sign that trade relations between the two world powers are heading in the right direction.
In one of its bigger concessions, Beijing agreed to allow foreign companies such as banks to issue debts and equities on the mainland and to offer brokerage and wealth management services in joint ventures. Funds offered by Chinese banks under the Qualified Domestic Institutional Investor scheme will also be permitted to invest in US stocks.
Meanwhile, China and the US have now agreed on closer co-operation to monitor product quality and food safety. Environmental officers from both countries will train and inspect together on a range of pollution and contamination matters. Research and development of biofuel will be shared. This renewed environmental co-operation is most welcome. It came days after former US vice-president Al Gore described the two countries as the world's most polluting nations in his acceptance speech as co-winner of this year's Nobel Peace Prize. He called on both nations to start working together.
Not all will be plain sailing, however. US Trade Representative Susan Schwab said Washington would continue to haul China before the World Trade Organisation over allegedly unfair trade practices. Intellectual property rights, entry barriers for foreign companies in strategic industries and the widening trade gap are some of the conflicts that still threaten to spark a trade war. The US is in danger of sliding into a recession; China is facing dangerously high inflation. The two engines of the world economy have much to gain from co-operation - for their own sake and the world's.