• Bloomberg


The U.S. and China will have no trouble filling the agenda as they meet this week for their seventh Strategic and Economic Dialogue. The challenge will be finding topics on which they can agree.

The world’s two largest economies started talks Monday in Washington on issues from trade to terrorism. The meeting takes place amid tensions over U.S. attempts to complete an Asia- Pacific trade pact that excludes Beijing, China’s efforts to establish alternate financial institutions, and a cybertheft of U.S. government workers’ data revealed this month, which U.S. officials say originated in China.

“There’s quite a list this year of U.S. somewhat petulant, even acrimonious, complaints about China,” said Chas Freeman, a former diplomat who served as the principal translator for President Richard Nixon’s 1972 visit to China.

Meanwhile, U.S. opposition to China’s Asian Infrastructure Investment Bank, and the U.S. drive to complete the Trans-Pacific Partnership, have “left the Chinese with no other conclusion to draw but that the U.S. is determined to keep them down in any role in global governance,” Freeman said. China is seeking progress on a bilateral investment treaty, with Vice Premier Wang Yang advocating for the deal in a commentary published in the Wall Street Journal.

Some persistent irritants have also taken on new urgency, including China’s completion of man-made islands in the disputed South China Sea and the planned January 2016 election in Taiwan, which the Communist Party considers a rogue province.

This year’s dialogue is meant largely to prepare for the Washington summit in September between U.S. President Barack Obama and Chinese President Xi Jinping, and the tensions on various issues “are not helpful in that regard,” Freeman said.

Even so, if the official gatherings don’t yield much progress they provide a venue to air disagreements and slow a slide into outright acrimony, said James Keith, a former U.S. ambassador to Malaysia.

“What they’re doing is ensuring that very difficult issues don’t get worse,” Keith said. “That’s not to say there aren’t some affirmative issues on the agenda, it’s just that it will take a while to work through those.”

U.S. diplomats and their Chinese counterparts began closed-door talks Monday likely by tackling “the most difficult, the most sensitive, the most vexing security issues that we face,” said Daniel Russel, the State Department’s Assistant Secretary for East Asian and Pacific Affairs. Among them are questions about how the U.S. and China engage and deal with each other on the high seas, in the air, in cyberspace, and in outer space.

“These are the issues that have the potential to drive strategic mistrust in the relationship, which is what we seek to avoid,” Russel told reporters in Washington on Thursday.

A U.S. official, speaking Monday as the sessions got underway, said the chance to talk candidly about disputed issues helps find ways to narrow those differences.

The official, who briefed reporters on condition of anonymity, said the U.S. raised concern about China’s behavior in the South China Sea, its human rights record, and suspected hacking attacks. After the Justice Department charged five Chinese military officers for economic espionage through hacking in May 2014, China stopped participating in the cybersecurity working group the two countries had created.

The official said the U.S. and China still use multiple channels to discuss cybersecurity and that a U.S. goal this week will be to underscore the implications of the hacking attempts with both military and economic officials, who may have different perspectives on the issue.

Chinese officials have said they have consistently opposed and cracked down on hacking, including any theft of commercial secrets.

Issues such as cybersecurity are so thorny, Keith said, that lower-level meetings won’t likely settle differences. Both sides will need to “rise above bureaucracy and get leadership to attack the problem,” he said.

On Tuesday, Secretary of State John Kerry and Treasury Secretary Jacob Lew, along with Wang and Chinese State Councilor Yang Jiechi, were to open the main session of the Strategic and Economic Dialogue. Later that day Kerry, who is recovering from a May 31 bicycling accident in France, will hold a third session on people-to-people exchanges. Lew will hold separate talks focused on economic topics.

Given the many contentious issues, U.S. officials will stress areas of cooperation, including the treaty to lower investment hurdles to each other’s economies. Earlier this month, the two sides exchanged initial lists of industries to be excluded from any deal.

“Many Chinese companies have long been frustrated by the high barriers the U.S. has imposed on investments from China such as stringent security reviews,” Wang wrote. “It is through dialogue that some of these concerns have been addressed by Washington. We look forward to more such positive steps.”

The leaders also will discuss the Iran nuclear talks and Afghanistan. One joint session will focus on ways the two nations can cooperate to help developing nations and countries in crisis.

Two other joint sessions will focus on an area in which the world’s two largest carbon emitters have found a sliver of common ground: the environment. One session will focus on clean energy and reducing emissions; another will be about protecting oceans and the marine environment.

Obama and Xi unveiled a climate agreement in November, aimed at cutting greenhouse-gas emissions, after months of behind-the-scenes talks. Ahead of the Obama-Xi summit and an international climate meeting in Paris in December, Russel hinted that this is one area where progress might be possible. “This year promises further cooperation on climate,” he said.

Concurrent with the strategic and economic talks will be the sixth annual U.S.-China Consultation on People-to-People Exchange, a forum that focuses on issues from health to education to sports.