Talking the talk

Chinese Vice Premier Liu He

The first ‘Strategic Economic Dialogue’ (SED) between the US and China took place in December 2006. For Washington, a high-level forum was needed for both countries to address economic challenges and opportunities, given that each were by then acknowledged as two key “stakeholders” in the international economic system.

Yet Beijing didn’t want to talk money alone. Three years later, the SED was renamed the ‘Strategic and Economic Dialogue (S&ED). The addition of the ‘and’ made a difference in the diplomatic interactions. The twice-yearly conversation began to address a much wider array of issues covering areas like security and climate change.

The scope of China-US cooperation narrowed again after Donald Trump became president. He rebranded the S&ED as the ‘Comprehensive Economic Dialogue’ (CED), suggesting Washington’s preferred focus on economic issues. But the CED didn’t work and was abandoned for good after its debut meeting in 2016. The Trump administration then took on a more confrontational approach. The world’s two biggest economies have since been wrangling with an escalation of trade and tech rows.

Will a permanent dialogue mechanism between Beijing and Washington be re-established under Joe Biden’s administration?

The first high-level contact between the two countries was not promising, bringing a heated (and televised) exercise in finger-pointing from both sides. Drama aside, there were no agreements when top diplomats from both sides met in Alaska in March. Before departing for Anchorage US Secretary of State Antony Blinken pointedly told journalists that the meeting was not a “strategic dialogue”, even though China’s state media had insisted on describing the summit in this way.

More recently there seems to be more signals emanating from Washington that China and the US could restart certain forms of conversation.

In an online event, US Trade Representative Katherine Tai said she expected to meet her counterpart “in the near term”.

“A lot of this is going to hinge on the conversations that we have with China, and our assessment of the effectiveness of the US-China trade and economic agreement,” Tai said.

It was the first time that the Biden administration had signalled an intention to hold formal economic talks with China, even if it means reassessing the so-called ‘Phase One’ trade deal, which was signed in January 2020 (viewed by Donald Trump as one of the biggest achievements of his one-term tenure).

Earlier this month the Wall Street Journal reported that China is considering whether to replace Vice Premier Liu He, a career economist and the chief negotiator for the ‘Phase One’ deal, with Hu Chunhua, another vice premier. The report also suggested the Chinese don’t want to confine the discussion to trade and economic issues. In such a case, Hu, a politician with extensive governing experience in Tibet and Guangdong, might be a more suitable candidate to act as China’s lead negotiator with the US, the newspaper said.

Speculation about Liu’s replacement grew further last week after Hu accompanied Xi Jinping during the Chinese leader’s inspection tour of Nanyang on May 12. Widely considered a senior economic advisor to Xi, Liu has frequently joined his boss during earlier local inspections.

Nevertheless, a spokesman for the Ministry of Commerce has since rebutted the Wall Street Journal report at a press conference. According to Ming Pao, a Hong Kong newspaper, there is no urgency on Beijing’s side to replace its chief negotiator with Washington. It added that the Communist Party of China is expected to hold its all-important 20th National Party Congress next year (the five-yearly event is scheduled to pick a new crop of Beijing leaders) and judging from more recent events, the newspaper believes Hu could be heading for a different position.

If so, Sino-US relations could remain in the same holding pattern…

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