U.S. Secretary of State
John Kerry, third left, speaks across from Chinese State Councilor Yang
Jiechi, right, during a session as part of the U.S.-China Strategic and
Economic Dialogues at Diaoyutai State Guesthouse in Beijing Monday, June
6, 2016. (Saul Loeb/Pool Photo via AP)
BEIJING—U.S. envoys pressed China on Monday to cut excess
steel production that is flooding global markets and to reach a
diplomatic settlement to territorial disputes in the South China Sea as
the two sides opened a high-level dialogue.
The annual meeting of Cabinet-level foreign affairs, trade and other
officials from both sides is meant to head off conflict. Officials
acknowledged differences on an array of issues but repeatedly stressed
their interest in amicable cooperation and pledged to work together to
see the Paris agreement on curbing emissions of climate-changing gases
ratified by the world’s governments.
The U.S. agenda includes pressing Beijing to move faster with plans
to shrink a bloated steel industry that its trading partners complain is
flooding their markets with unfairly cheap exports, hurting foreign
producers and threatening jobs. Washington has responded by imposing
anti-dumping tariffs on steel, and European officials say they have
launched a trade investigation.
“Excess capacity has a distorting and damaging effect on global
markets,” U.S. Treasury Secretary Jacob Lew said at the opening of the
two-day event, “and implementing policies to substantially reduce
production in a range of sectors suffering from overcapacity, including
steel and aluminum, is critical to the function and stability of
international markets.”
The annual Strategic & Economic Dialogue rarely produces
agreements on major issues, but provides what officials on both sides
say is a valuable setting to air disputes, clear up misunderstandings
and share experiences.
U.S.
Secretary of State John Kerry, second left, and U.S. Treasury Secretary
Jacob Lew, left, attend a session on Climate Change during the
U.S.-China Strategic and Economic Dialogues at Diaoyutai State
Guesthouse in Beijing Monday, June 6, 2016. (Saul Loeb/Pool Photo via
AP)
This year’s event is led by Secretary of State John Kerry and Lew on
the U.S. side, and Vice Premier Wang Yang and State Councilor Yang
Jiechi on the Chinese side.
Beijing announced plans this year to slash the size of its
state-owned steel and coal industries at a cost of millions of jobs. But
plans for other bloated sectors, including aluminum, glass and solar
panels, have yet to be announced.
Speaking at the event’s opening ceremony, Chinese President Xi
Jinping promised action on reducing overcapacity but announced no new
initiatives.
“China will redouble efforts to promote supply side structural
reform,” said Xi, who also is leader of the ruling Communist Party,
using Beijing’s term for cutting production.
Washington also wants China to move faster to reduce a rising burden
of corporate debt that financial analysts worry could hamper economic
growth.
U.S. officials also are pressing Beijing to ease market access for
financial and other services, an area where foreign business groups
complain that China is trying to shield its companies in violation of
free trade commitments.
On the environment, envoys from both sides pledged to ensure the
Paris agreement is ratified and to persuade other governments to put it
into action.
Kerry described climate cooperation as “one of the strongest pillars
of our relationship.” He expressed hope the same spirit of compromise
could be infused into disagreements over maritime security and human
rights.
North Korea’s missile and nuclear provocations and how to respond to
them are another irritant in the relationship. Kerry said the two
countries must stand together against Pyongyang as they did in clinching
last year’s nuclear accord with Iran.
“It is absolutely vital to use this meeting … to work constructively
on those differences,” Kerry said. He called this week’s dialogue an
opportunity to “seek creative ways to narrow them, or eliminate them
altogether.”
Amid deepening U.S. concern that China is militarizing the South
China Sea, Kerry said he would “make it clear that we are looking for a
peaceful resolution to the disputes.”
Beijing and neighbors including Vietnam and the Philippines have
conflicting claims to portions of the sea and possible oil and gas
resources. China’s military is building outposts on manmade islands to
enforce its claims.
Beijing said over the weekend that it would ignore an upcoming
international arbitration decision in a dispute with the Philippines.
China also has conflicting claims with Taiwan, Indonesia, Vietnam and
Brunei, who all want American help. Further complicating matters are
reports that the Chinese may soon establish an air defense zone over
part of the sea, which the U.S. opposes.
“We have taken no position on any of the claims,” Kerry said. “The
only position we have taken is, let’s not resolve this by unilateral
action. Let’s resolve this by rule of law, by negotiation, by
diplomacy.”
Xi warned against allowing diplomatic tensions to disrupt mutually
beneficial trade and other relations. He acknowledged differences “are
hardly unavoidable,” but called on Washington to help manage them in a
“pragmatic and constructive fashion.”
“What is important is to refrain from taking differences as excuses for confrontation,” Xi said.
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