Thayer Consultancy

ABN # 65 648 097 123

Background Briefing: China-US 4th Strategic and Economic Dialogue Carlyle A. Thayer May 6, 2012

[clientnamedeleted] 1.Wasanyprogressmadeatthe4thStrategicandEconomicDialogue(SED)? ANSWER: The 4th Strategic and Economic Dialogue (SED) reviewed developments over the past three years since the SED was first established. Progress has been incremental. Perhaps the most notable initiative was to establish the USChina Maritime Safety Dialogue Mechanism between the US Coast Guard and the China MaritimeSafetyAdministrationwhichisscheduledtoholditsfirstmeetinglaterthis year. A joint search and rescue exercise is under consideration. Secondly, the two sidesdiscussedcooperationincybersecurityandmaritimesecurity.Norealprogress wasreportedbutitwassignificantthatsuchsensitiveissueswerediscussed. 2.Whatarethemostimportantresultsofthe4thSED?Arethereanyissuesthatthe twosidescouldnotreachacommonviewpoint? ANSWER: The most important results of the 4th SED fall into two area. On the economic side, the U.S. recognises positive actions by China to allow its Yuan to appreciateagainsttheU.S.dollar.ThishasloweredthecostsofexportingUSgoods toChinaandreducedthetradedeficit.Onthestrategicfront,thetwosidesreached understandingtocooperatetoaddressfourglobalhotspots:Iraniannuclearissue, denuclearization on the Korean peninsula, the conflict between Sudan and South Sudan,andthesituationinSyria.Breakoutsessionswereheldonsixareasofmutual interest: climate change, energy security, policy planning, South Asia, SudanSouth Sudanandpeacekeeping. Secretary Clinton made clear that human rights still remained a major issue in bilateral relations. There appears to be difficulty in advancing military to military relations. This is the case of "the dog that didn't bark", in other words neither the jointstatementnorpublicremarksbythekeyministersrevealedanyprogress. 3.Whatisyournetassessmentofthe4thSED? ANSWER: This dialogue reflects the most important global dialogue mechanism between an established power, the United States, and a rising power, China. After fouryearstheSEDdemonstratesthatChinaandtheUnitedStatescanaddressthe wide rangeof interestsand concerns between them in an institutionalised format. TheregularschedulingoftheSEDmeansthatalltheotherbilateraldialogueshave anannualdeadlinetoreportprogress.

2 Thedialogueproducedareportcardonextensiveareasofcooperationfromscience andtechnology,cleanenergy,todevelopmentinAfrica.