As prepared for delivery
WASHINGTON -- I would like to thank Vice Premier Wang Yang, State Counselor Yang Jiechi and the Chinese delegation, as well as my U.S. colleagues for their participation in a productive S&ED over the past two days. Our discussions have been informative, insightful, and frank — reflecting the full range of issues we face in our bilateral relationship.
The mission of the U.S.-China Strategic & Economic Dialogue is to make concrete progress on the issues that matter to the citizens of both our countries — cooperating where we can and directly addressing the issues on which we differ. Through the S&EDs, we have strengthened our bilateral economic ties, and built a mechanism that allows us to constructively address challenges as they arise.
And we have delivered concrete results. U.S. exports to China have doubled since 2009, growing more than twice as fast as exports to the rest of the world. China’s RMB has appreciated and the exchange rate has become more flexible, with China’s foreign exchange intervention declining over the past year. China’s current account surplus has fallen — from a peak of approximately 10 percent of GDP before this Administration took office to 2 percent last year. But more progress is needed in order to ensure balanced and sustainable growth for both our economies. It is critical that China remain on a path toward a more market-determined exchange rate and a more transparent exchange-rate policy.
More broadly, our economic discussions over the past two days have focused on a few concrete areas:
Creating benefits for both our citizens by expanding opportunities for trade and investment;
Implementing China’s economic reforms to ensure sustained, balanced growth in China, and a more rapidly growing Chinese market for the goods and services of the United States and the rest of the world;
Cooperating to support and strengthen the international financial system, including by upholding the highest standards; and
Coming together to tackle the most pressing global issues of our day, including climate change.
We have also had candid conversations about standards of behavior in cyberspace. We agree that there is value in bilateral and international cooperation on these issues.
It is clear from our discussions over the past two days that China’s leaders are working hard to reform China’s economy and growth model. This ambitious set of reforms is needed to reorient China’s economy towards domestic consumption, and away from exports, heavy industry, and investment. Implementation is still in the early stages, but already we are starting to see some progress.
Let me give a few examples of progress that we have made at this year’s S&ED:
With regard to exchange rate reform, China has committed to intervene in the foreign exchange market only when necessitated by disorderly market conditions, and to actively consider additional measures to transition to a market-oriented exchange rate.
We welcome China’s commitment to publish economic data under the IMF’s SDDS template by the end of the year, and the explicit recognition that it is in China’s own interest to adopt the transparency standards of major reserve currencies.
On Information Communication Technology issues, China has committed to ensure that regulations in the commercial banking sector will be nondiscriminatory, will not impose nationality-based requirements in the commercial bank ICT space, and will enhance policy transparency in this area. We will continue to push China on this priority.
On the Bilateral Investment Treaty, both sides have reaffirmed that the negotiation of a high-standard BIT is a top priority in our economic relationship, committing to intensify negotiations and exchange improved negative list offers in early September.
We also had candid discussions on China’s National Security Review, including on our concerns regarding its broad scope. We are also pressing for regulatory certainty under the national security review to avoid retroactive reviews and discussing our concerns regarding possible regarding recognition of third parties.
With regard to the financial sector, China committed to reforms, including taking the final steps in liberalizing interest rates, opening capital markets, and expanding access to foreign financial services firms and investors. By shifting resources to China’s households and private firms, rather than state-owned enterprises, these initiatives will support China’s transition to consumption-led growth that creates opportunities for U.S. workers and firms.
On climate and energy cooperation, both sides agreed to use public resources to finance and encourage the transition towards low-carbon technologies. We are also determined to work constructively together to support the effective operation of the Green Climate Fund, which we both recognize is the main dedicated multilateral climate finance fund. We further agreed to finalize our G-20 fossil fuel subsidy peer review by the end of 2015.
We welcome these important steps that China’s leaders have taken and encourage them to follow through on the commitments they have made.
We also held constructive discussions on our joint responsibilities in upholding high governance and standards in the international financial system.
China has a significant role in the global economic and financial architecture, and we welcome China as a partner in supporting, maintaining, and advancing high standards in multilateral institutions as we work together to address the challenges of the 21st century. This is especially critical as we head into China’s G-20 host year.
We also discussed the need to lay a strong foundation of economic cooperation, and economic reforms, for President Xi Jinping’s visit to the United States later this year.
While today’s commitments do not resolve all of our concerns, or China’s, they do represent real progress that will create opportunities for U.S. workers and companies in a growing Chinese market.
Finally, I want to thank the delegations on both sides for their candor and openness during our conversations. Clear communication is critical for a successful bilateral relationship. And I want to personally thank Vice Premier Wang for his leadership in these discussions.
I look forward to continuing to work with Vice Premier Wang as we build towards a successful visit by President Xi and expand on the good progress we have made here.
Thank you very much.
I am now pleased to introduce Vice Premier Wang Yang.