A chance to mend ties

At the start of the sixth Strategic and Economic Dialogue between China and the United States, leaders of both countries stated the need to manage their differences and bolster cooperation. The two-day talks in Beijing are expected to focus on cyber-security, maritime disputes, the Chinese currency and an investment treaty. US Secretary of State John Kerry and Treasury Secretary Jack Lew chair the US delegation, with Vice Premier Wang Yang and top diplomat Yang Jiechi leading the Chinese side.

Over the past months, tensions between China and key US allies in Asia have been mounting over territorial disputes in the East and South China Seas. Moreover, ties between Beijing and Washington have become increasingly strained following mutual accusations of political and economic cyber-espionage.

David Dollar, an expert on US-China economic relations says in a DW interview the current talks may reverse the perceived downward spiral in bilateral ties, but adds that it is unlikely that Beijing will use the summit as a forum to announce important new measures.

DW: How important is this meeting for Sino-US relations?

David Dollar: This year's US-China Strategic and Economic Dialogue is important because the bilateral relationship has been deteriorating due to maritime disputes and cyber theft. Those issues will be discussed but it is unlikely there will be a resolution of the differences.

Is any progress to be expected on the core security issue of cybertheft?

The best that can be hoped for in the cyber area is that the two sides will resume regular discussions through the cyber working group.

Which role will North Korea's nuclear program play in the talks?

North Korea's nuclear program will also come up in the talks. China's President Xi Jinping has just been in South Korea and it will be interesting to see if the US and China can start to discuss, even in very tentative terms, some scenarios for reunification of the Korean Peninsula.

Are any major economic deals to be expected?

On the economic side, US-China relations are stagnating. The Third Plenum resolution outlines a range of reforms that would help China's economy and also lay a better foundation for bilateral relations. These include financial liberalization, opening the service sectors to foreign investment, and moving to a market-determined exchange rate.

So far, however, there has been slow progress in terms of implementing these reforms. It is unlikely that China would use the bilateral dialogue with the US as the forum to announce important new measures, so major economic deals are not likely. Still, the meeting is important as it can reverse the perceived downward spiral in the relationship.

What does the US expect to achieve in these talks?

US President Barack Obama will likely visit China in November at the time of the APEC leaders summit. A key question is whether by then China is ready to make any important market opening moves.

For the US, the most important issue is market access: both for imports such as beef and automobiles, as well as for direct investment in sectors such as financial services, telecom, media, and logistics. China is the most closed of the G-20 countries.

If it would follow through on the reforms indicated in the Third Plenum resolution that would lead to a more balanced economic relationship and a significant reduction in friction. If the economic relationship can move ahead, it is easier to manage the strategic disagreements, many of which are not going to go away anytime soon.

David Dollar is a senior fellow at the Brookings Institution a leading expert on China's economy and US-China economic relations. From 2009 to 2013, Dollar was the U.S. Treasury Department's economic and financial emissary to China.