July 8, 2013 / 10:24 PM / 6 years ago

U.S.-China talks chance to sound out Beijing on economic reforms

WASHINGTON (Reuters) - High-level U.S.-China security and economic talks in Washington this week will give the United States a chance to size up Beijing’s new leadership team and its talk of economic reform, American officials said on Monday.

Both the United States and China are fielding cabinet-level leaders at the annual Strategic & Economic Dialogue (S&ED), to open in Washington on Wednesday for two days.

U.S. Secretary of State John Kerry and Treasury Secretary Jack Lew will host Chinese State Councilor Yang Jiechi and Vice Premier Wang Yang - representatives of a new leadership lineup installed in Beijing in March under President Xi Jinping.

This week’s meetings, involving the heads of 14 U.S. government agencies and the leaders of 16 Chinese state bodies, will allow the American hosts to seek explanations and details about economic reform plans circulating in Beijing, a senior U.S. economic official said.

“On commitment to reform, from everything that we’ve been hearing, both in our private conversations as well as what we’ve seen in senior level statements from Chinese officials, and in their own papers and documents, there’s a strong commitment to move forward with reforms,” the official told reporters.

“How they go about doing those reforms will matter greatly for us - how quickly they do that I think is still a question as well,” the official added.

“NEW TYPE OF GREAT POWER RELATIONSHIP”

A second U.S. economic official cited a decision by China’s central bank, the People’s Bank of China, to try to bring debt-fuelled expansion under control by allowing a cash crunch last month that sent short-term lending rates to record highs.

“I think the actions taken by PBOC to delay providing liquidity in the interbank markets in the last few weeks was a signal to market participants that they needed to have greater discipline and greater prudence in their lending decisions,” said the second official.

“I think that’s part of a move towards a more efficient, more market-based financial system,” the official added.

Most U.S. experts on China say details of Beijing’s reform plans for rebalancing its economy away from heavy reliance on investment toward more consumption will emerge only after a key plenum of the ruling Communist Party in autumn.

The talks were launched five years ago to help the world’s two largest economies manage an increasingly complex relationship. They cover issues ranging from North Korea to climate change to cyber security to human rights.

A U.S. official on the strategic side said Washington also is looking for concrete ideas behind China’s frequently stated call for a “new type of great power relationship” - an expression Xi used during his informal summit with President Barack Obama last month in California.

“If we are going to establish a new type of relationship, what we would like to see is something more concrete in terms of cooperation,” said the third U.S. official.

“The key for us is to find a way to do that and to build confidence between the two sides so we can actually achieve what we hope to,” added the official.

China’s ambassador to the United States, Cui Tiankai, has said that phrase describes an effort to avoid China’s emergence as a world power disrupting the existing order and triggering conflict, as Germany and Japan did in the previous century.

Writing by Paul Eckert; Editing by Lisa Shumaker

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