Annual dialogue moves China-U.S. ties forward

The high-level talk between China and the United States that concluded on Tuesday demonstrates that the world's two largest economies can cooperate when they are capable, and directly address their differences when they can not.

The candid and constructive discussions over the past two days, in the eighth round of China-U.S. Strategic and Economic Dialogue (S&ED), have yielded concrete results that will benefit both.

The United States gained easier and cheaper access to China's financial market, with China offering the United States a 250-billion-yuan (38 billion U.S. dollars) quota to buy Chinese stocks and bonds. That makes the United States Chinese mainland's second-largest eligible offshore investor after Hong Kong.

Both sides also agreed to designate one Chinese and one U.S. bank as clearing banks in the United States for settling yuan transactions. That will speed up the pace of making the United States a major trading hub for the yuan.

As U.S. Business tycoon Michael Bloomberg said, it is a highly encouraging development that will benefit businesses in both nations.

It shows that although China tightly regulates its financial market, it is moving to open up more to U.S. investors. In the foreseeable future, the financial flow between the two countries will be easier and at lower cost and that will eventually benefit the two economies.

Also, without gaining a foothold in the United States, the world's most important financial capital, the yuan's internationalization is merely empty talk. The new move could help the yuan's going global.

On issues where the two sides are yet to reach consensus such as the Bilateral Investment Treaty (BIT), both showed will and wisdom to move the agenda forward during the annual dialogue.

China will release its third negative list to the United States in mid-June. It is fair to expect the new list will be a pragmatic one that will narrow the differences between the two sides.

Both China and United States have benefited enormously from opening up to and integrating with each other and the world economy. Both have an enormous stake in each other's economic success.

Dialogue has enhanced mutual understanding between China and the United States, demonstrating that common interests can be expanded and disagreement can be managed.

(APD)