This week's high-level dialogue between the US and China offers an opportunity to build on the recent informal presidential summit. But recent revelations about US cyber activity and lingering fundamental tensions in the relationship make this a difficult period for the two sides.
On 10 and 11 July, the fifth round of the China-US Strategic Economic Dialogue (SED) will take place in Washington. On the Chinese side the talks will be led by Vice Premier Wang Yang (acting as special representative of President Xi Jinping) and Yang Jiechi, the State Councillor responsible for foreign affairs. The US team will be led by Secretary of State John Kerry and Treasury Secretary Jack Lew.
The SED takes place a month after the informal summit’ between Presidents Xi and Obama in California. That meeting afforded an opportunity for the two leaders to develop their relationship and to discuss in detail the long list of issues on their bilateral and global agendas.
Both sides have been keen to play down expectations of substantive progress, and the main significance of the California meeting was that in-depth discussion was possible in the early months of Xi's presidency and Obama’s second term.
In advance of the June meeting the US had raised the temperature over Chinese 'cyber espionage' to the extent that the issue looked as if it would dominate the agenda. On this, the talks themselves agreed to working-level follow up, but the prospects of any progress have been thrown aside by the Edward Snowden revelations, which emerged as the summit took place.
These revelations have done more than take the wind out of US sails on this issue: the US has lost what moral high ground it might have had on cyber espionage. The immediate result is that cyber issues are unlikely to dominate this week's dialogue, even if the US wants to keep the topic on the agenda.
One positive consequence of this could be the subsequent opening for other issues to be addressed. Among these is North Korea, where quiet Chinese diplomacy over recent months has, at least according to Chinese reports, created the possibility of a return to talks between the main parties. Recent visits to Beijing by North Korean envoys have led to hints that Pyongyang might be softening its earlier posture. However, no major new announcements should be expected to come out of the Washington dialogue. Wang Yang is one of the more innovative members of the Chinese leadership, but the form of Chinese diplomacy deployed means that he is unlikely to depart from positions already stated by Xi.
When it comes to global issues, the US does not see in China a partner which can help deliver many of its objectives, from Syria to trade policy. Neither does China want to sign up to a 'G2' to manage global issues jointly with the US - its official position is that the world is moving towards multipolarity, and the way it has been developing relations with Russia, for example, suggests that it is working wherever possible to create this outcome.
In East Asia, cause and effect are difficult to disentangle. But the last few years have seen growing conflict between US and Chinese regional approaches, the former's 'rebalancing' being matched by the latter's 'assertiveness'.Regular dialogue is needed to manage these differences. The SED is part of this dialogue, but don’t expect too much evidence of progress in the short term at least.
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