The fifth Sino-US economic summit ended yesterday like its forerunners, without any breakthroughs on major issues. That does not mean it was a failure. As its name suggests, the strategic economic dialogue is a forum for a frank, top-level exchange of views. It has proved important in building trust and understanding between the world's biggest economy and its emerging rival. It was unrealistic to expect surprises during the transition from the Bush administration to that of US president-elect Barack Obama. But a pledge of US$20 billion to fund trade by China and the United States with developing countries is therefore as welcome as it is timely.
The latest talks will be remembered for two other reasons. It was the last appearance of outgoing US Treasury Secretary Henry Paulson as leader of the US delegation. The strategic economic dialogue was really his baby. He was instrumental in setting it up. Under domestic political pressure over cheap Chinese imports and claims that unfair trade was destroying American jobs, the Bush administration realised that although the problems were not easily solved, it had to be seen to be doing something to engage Beijing. It helped that Mr Paulson enjoyed excellent relations with Chinese leaders as head of investment bank Goldman Sachs. He remains one of the few US officials with intimate knowledge of China.
Mr Paulson has left his mark on Sino-US relations, first as the voice of reason amid China-bashing in US political and business circles, and then as point man for the Bush administration's response to the global financial meltdown. The dialogue has helped ease tensions between Beijing and Washington arising from both issues. Officials of the incoming Obama administration have indicated the new government will continue the twice-a-year talks. But it remains to be seen if they will attach the same importance to them as the Bush administration, at least in its early days. Trade and economic relations with China can be expected to take a back seat amid the financial crisis, as they did during the presidential election.
The second reason the latest talks will be remembered is that the boot is now on the other foot. The US has used the dialogue to lecture China on the need to allow its currency to appreciate and do something about its massive trade imbalance. This week's meeting was China's turn to lecture the US over the financial crisis, calling on it to put its house in order by stabilising its financial markets, reining in credit-fuelled consumption and increasing national savings.
Both sides have a point. But just as the notion that a huge revaluation of the yuan would solve America's economic problems was populist domestic politics, the idea of turning US consumers into miserly savers would do nothing to keep Chinese factories open and stem job losses. The value of the dialogue is that it is a forum for such home truths, and promotes mutual understanding and constructive engagement.
For different reasons, both countries need to take bold steps to stimulate domestic consumption to underpin economic growth and employment. It is good that discussions this week included the importance of domestic-led growth and currency reform to balanced growth. A joint pledge to fight the emergence of trade-protectionist sentiments during economic downturns was timely. The two countries also furthered co-operation on the abiding global issues of energy security, environmental sustainability and product safety. The dialogue is one of the more positive achievements of the Bush presidency. It deserves to become a legacy.