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#4581, 25 July 2014
US-China Strategic and Economic Dialogue: Lessons for India
Teshu Singh
Senior Research Officer, CRP, IPCS
Email: teshu@ipcs.org

The Sixth US-China Strategic and Economic Dialogue (S&ED) was held in Beijing from 9-10 July 2014, amid growing tension between the US and China over the maritime disputes of the South China and the East China Seas. This commentary highlights the major outcomes of the 2014 dialogue and delves into the lessons that can be learnt for the Sino-Indian SED.

Major Outcomes of the Dialogue
More than 300 areas of cooperation were agreed; 116 from the strategic track and 90 from the economic track. With increasing stakes in the bilateral relations, the areas of cooperation between the two countries have risen from 91 to 116. The list covered almost all the major areas of cooperation. Of the 116 (divided into 8 areas), the outstanding ones were the developments in the Asia Pacific, the China Garden, health, and climate change.

• Developments in the SCS have brought US-China relations to a standstill. With the increasing US role in the SCS region there is a growing notion of containing China in the region. To dispel this notion from growing further, China was invited to the RIMPAC exercises this year. Coupled with this was the development in the Asia Pacific; ADIZ in the ECS and the developments in the Korean Peninsula. All these issues were addressed at length during the dialogue.

• To enhance bilateral relations and to give a boost to people-to-people contact, the idea of China Garden was taken forward and it was agreed that the construction would start by 2016.

• The ten year Framework on Energy and Environment was reviewed and a joint report with sections on “Building the Foundation for Continued Partnership” and Looking Ahead” was issued to review the progress for five years. The US department of Energy and National Energy Administration (NEA) of China held their first meeting. The fourth Advanced Bio Fuels Forum was agreed to be held in 2015.

• Disagreement between the US and China over many climate issues represent the biggest threat to climate change. Early this year, the US and China agreed to devote efforts and resources to climate change through the S&ED. China is the second largest emitter of carbon dioxide and the US has not ratified the Kyoto Protocol. China expects the US to start the process of cutting down on emission first. To take the initiative of the US-China Climate Change Working Group (CCWG) established during the fifth round of the S&ED forward, discussions were held on the issue of hydroflurocarbon (HFCs). In addition, discussions were held on the regional air quality management, control of fine material, and ozone.

On the economic track, the dialogue took the Bilateral Investment treaty (BIT) a step ahead; it was agreed to identify a ‘negative list’ for negotiations by 2015. This would open up China’s markets to foreign investments and create opportunities for US firms to participate in China.

Lessons Drawn
During the Xi-Obama meeting, it was agreed to come up with a ‘new type of relationship’. To take this initiative forward, a lot of positive terms such as ‘common interest’, ‘cooperation’ and ‘constructive’ were used. The S&ED has shown to the world that two countries with different cultural and social system can cooperate. The dialogue mechanism is a unique platform to promote understanding, expand consensus, manage differences, improve mutual trust and increase cooperation. It is the most intensive and expansive forum ever between both governments, bringing together dozens of agencies from both sides to discuss the most pressing bilateral issues, from security to energy to human rights. It illustrates the facts that even relations as complex as US-China can be cooperative if a platform is provided. This is evident from the exhaustive list that has been drawn by expanding consensus and narrowing their differences. Thus, a dialogue of this nature is important to address the widening mistrust in any bilateral relations and to identify future trends. It has proved that despite problems on the strategic track there can be progress on the economic front, thereby avoiding any kind of deadlock.

There are lessons to be drawn from the present S&ED for the Sino-Indian SED. The US-China S&ED was initially started as a SED and eventually a strategic track was added in 2011. The addition of the strategic track has broadened the agenda of the dialogue and created an alternate platform to discuss issues that are irresolvable on one track. On similar lines, perhaps a strategic track can also be considered for the the Sino Indian SED so that security and economic issue scan be linked in a strategic way .  It will help in solving the impending issues in bilateral relations, which will further help in preventing the deterioration of bilateral relations.

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