UpdateChina and US agree to tackle steel glut and enforce North Korean sanctions as high-level talks end

China pledged on Tuesday to rein in excess steel output and work with the US to enforce sanctions against North Korea, but there was no progress on the simmering tensions in the South China Sea.

The pledge was made as China and the United States wrapped up their two-day annual Strategic and Economic Dialogue, labelled by officials as the most productive in years despite disagreements on many issues.

On the plus side, Beijing agreed to try to curb excess steel production, avoid competitive devaluations of the yuan and wind down unprofitable “zombie enterprises”. Both sides also said they welcomed investment from each other.

Beijing ready to impose air defence identification zone in South China Sea pending US moves

China’s vow to persist with economic restructuring included specific steps to further open its financial sector to US firms, US Treasury Secretary Jack Lew said.

Vice Foreign Minister Zheng Zeguang said the two sides would step up cooperation against graft, and hold more military drills.They were also determined to enforce sanctions against North Korea.

But they disagreed on how to rid the Korean peninsula of nuclear weapons. The US favours putting more pressure on Pyongyang, while China insists on reviving talks and strongly opposes US deployment of an anti-missile system in South Korea.

The two nations are also divided over disputes in the South China Sea, despite a commitment to improve rules for air and maritime encounters.