U.S. Reports Progress in Annual Economic Meeting with China
At the conclusion of the eighth U.S.-China Strategic and Economic Dialogue in Beijing June 7, the Treasury Department issued a fact sheet indicating that China made “new and strengthened commitments” on key economic issues such as exchange rate reform, excess industrial capacity, non-discriminatory trade and investment measures, and economic transparency.
Steel overcapacity. The U.S. acknowledged Chinese plans to close 100-150 million metric tons of steel capacity and to strictly prohibit the expansion of crude steelmaking capacity over the next five years. China committed to adopt measures to strictly contain steel capacity expansion, reduce net steel capacity, eliminate outdated steel capacity, and urge the exit of steel production capacity that falls short of environmental, energy, quality or safety standards. China also firmly committed to support international efforts to address excess capacity at the OECD and to engage with the U.S. and others on a potential global steel forum. Further discussions on aluminum overcapacity will be held at a later date.
Bilateral investment treaty. Both sides committed to exchange revised and improved negative list offers by mid-June.
Agricultural biotechnology products. China committed to review applications of agricultural biotechnology products in a timely, ongoing and science-based manner and to complete biotech approvals following the completion of assessments by the National Biosafety Committee. The U.S. committed to prepare a study on the global impact of asynchronous approvals on sustainability, trade and innovation. The two sides are to meet by the end of 2016 to discuss the full range of agricultural biotechnology policy matters.
Industrial policy. China committed that all of its industry development plans will treat foreign and domestic enterprises equally. China also committed to publish measures implementing the China Manufacturing 2025 Plan for public comment and to publish draft plans for industrial development funds.
Export financing. China and the U.S. committed to enhancing the effectiveness of the International Working Group on Export Credits by seeking reforms to the IWG structure as well as other steps that will help to advance progress on developing new international export credit guidelines.
Exchange rate reform. Since June 2010 the Chinese yuan has appreciated 24 percent on an inflation-adjusted, trade-weighted basis. China has committed to continue market-oriented exchange rate reform, allowing for two-way flexibility of the yuan, and reaffirmed its commitments to avoid competitive devaluation and not target the exchange rate for competitive purposes.
Economic transparency. To aid in assessing the extent of rebalancing toward consumption and services, China committed to publish in the near future a more inclusive monthly indicator of service sector activity and to work toward improving its quarterly GDP accounting by expenditure. China also committed to work toward G20 data standards for fiscal and financial data; agreed to make available more complete, reliable and detailed publications of energy statistics on a more frequent basis; and reaffirmed a commitment to publish rules and regulations impacting foreign financial institutions for 30-day comment periods.
Consumption-led growth. China committed to step up its efforts to rebalance its economy toward household consumption and services while ensuring that investment is driven by the
private sector. Among other things, China committed to liberalize prices in the electricity, petroleum, natural gas, transport, post and telecommunications, and municipal public utilities sectors.