Education General

U.S.-China Strategic and Economic Dialogue

PRESIDENT XI: (Via interpreter) Secretary of State John Kerry, Secretary of the Treasury Jacob Lew, distinguished guests, ladies and gentlemen (inaudible), today, the eighth round of the China-U.S. Strategic and Economic Dialogue, and the seventh round of the China-U.S. High-Level Consultation on People-to-People Exchange are held here in Beijing.

Let me begin by extending hearty congratulations on the opening of the S&ED and the CPE, and a big welcome to Americans who have traveled all the way to China. (Applause.) Almost around this time three years ago, President Obama and I met at the Annenberg estate, where agreement was reached for the two sides to step up strategic communication, expand practical cooperation, properly manage differences, and work vigorously to build a new model of major country relationship between China and the United States.

Hard work pays off and our efforts over the past three years have come to fruition. Thanks to our consultative efforts, our two countries have cooperated at the bilateral, regional, and global levels in a wide range of areas, registering new progress in our relations. We witnessed record highs in trade and two-way investment, enjoyed closer people-to-people and subnational exchanges, and made new headway in cooperation in cyberspace, law enforcement, and military-to-military exchanges.

We issued three joint statements on climate change and worked together with other countries for the conclusion of the historic Paris agreement. We maintained effective communication and coordination on hotspot issues like the Korea nuclear issue, the Iranian nuclear issue, and Afghanistan and Syria. Such cooperation has broad, tangible benefits to both countries and given a strong boost to peace, stability, and development of the Asia Pacific and beyond.

What we have achieved over the past three years has not come by easily and could well serve as a guide for the growth of China-U.S. relations in the time to come. Most important, I believe, is that the two sides need to stay committed to the principles of non-confrontation, non-conflict, mutual respect, and a win-win cooperation, and work steadily toward this new model of major country relationship – for this is a choice that meets the fundamental interests of both the Chinese and American people as well as the wish of all people in the world.

Whatever changes in the international landscape, we need to stay on track and work unswervingly toward this overarching goal. We now live in a world of rapid development and changes. The move toward multipolarity, the increasing trend of globalization, and the quick application of information technologies have all been accompanied by growing changes, challenges of various thoughts, and have brought countries even closer than ever before. It is a time when ideas of a zero-sum game and conflicts and confrontation must give way to common development and win-win cooperation.

It thus falls upon China and the U.S., the largest developing and developed country respectively, and the two largest economies in the world, to act in the fundamental interests of our people and people of the world, and move steadily forward along the path of building this new model of major country relationship. China and the U.S. need to increase mutual trust. For the Chinese, trust is always something to be cherished. In the word of Confucius, who lived over 2,000 years ago, “A man without trust can hardly accomplish anything.” Trust stands as the basis of relationship among people and provides a prerequisite for state-to-state exchanges.

For China and the U.S., we need to maintain frequent communication and build up strategic mutual trust in order to avoid strategic misjudgment and prevent temporary problems from affecting our overall relations. With sufficient mutual trust, China-U.S. cooperation will stand on a more solid basis and enjoy even more robust growth. China and the U.S. need to expand mutually beneficial cooperation. Over the past 37 years since the establishment of diplomatic ties, China-U.S. cooperation has grown steadily in both width and depth, bringing real benefits to our people. We need to embrace a win-win perspective and move our cooperation to a higher level. It is imperative that we increase macroeconomic policy coordination and work together with other parties concerned to ensure that the G20 Hangzhou Summit delivers positive outcomes to boost confidence and invigorate global growth.

It is important that we do our best to conclude a mutually beneficial bilateral investment treaty at the earliest possible date to foster a new highlight in business and trade cooperation. And it is important that we deepen the exchange in the cooperation in climate change development, cyber issues, counterterrorism, nonproliferation, military-to-military relations, and law enforcement, and step up communication and coordination on major international and regional issues, as well as issues of global significance. This way, we could bring more real benefits to our people and provide more public goods for greater peace, stability, and the prosperity of the world.

China and the U.S. need to properly manage differences on the sensitive issues. China and the U.S., each with its own uniqueness, are different in terms of history, culture, social system, and people’s aspiration. Differing views between us are hardly avoidable. In fact, in this world of diversity, differences among countries are just natural. Even family members do not always see eye to eye. One should not be afraid of differences. What is most important is to refrain from taking the differences as excuses for confrontation.

There are differences that could be addressed by redoubling our efforts. For those differences that cannot be settled for the time being, we need to manage them in a pragmatic and a constructive fashion by putting ourselves in each other’s shoes. As long as we observe the principles of mutual respect and equality, shelve differences to seek consensus, and try to resolve them through expanding common ground, we will be able to overcome difficulties and obstacles, and prevent major disruptions in bilateral relations.

China and the U.S. need to increase communication and cooperation over Asia Pacific affairs. The vast Pacific should be a stage for inclusive cooperation, not an arena for competition. China pursues a neighborhood diplomacy of amity, sincerity, mutual benefit, and inclusiveness, and is committed to advancing peace, stability, and development in the Asia Pacific region. The extensive common interests between China and the U.S. in the Asia Pacific make it possible for the two countries to keep frequent communication, have more cooperation, and jointly respond to challenges. The two countries may work together to foster a circle of common friends that is inclusive rather than exclusive, and both countries should play such a role that they will build and maintain prosperity and the stability of this region.

China and the U.S. need to enhance friendship among the people. Friendship and exchange among the people provides constant driving force for growing bilateral relations. Mutual understanding and a friendship of the peoples provides a basis for the growth of China-U.S. relations. I visited the U.S. many times. Be it my old friends in the state of Iowa or the lovely children I met in the Lincoln High School of Tacoma, the American people have moved me deeply with their friendly sentiments towards the Chinese people. And I’m glad to note that last year alone, some five million visits were made between the people of both sides. What we need to do is to build more platforms and keep facilitating these exchanges so that the friendship between our people will go on from generation to generation.

Ladies and gentlemen, friends, distinguished guests, this year marks the beginning of China’s 13th Five-Year Plan. China will follow its strategic plan to build a society of moderate prosperity in all respects, and it will comprehensively deepen reform, strengthen the rule of law, and enhance party discipline. China’s development will be guided by the principles of innovative, coordinated, green, open, and shared development.

China will redouble efforts to promote supply-side structural reform, shift growth models through restructuring, and achieve better opening up. We are confident that the goals set for economic and social development will be met as planned. China’s development will mean more opportunities for the world, and China will have even closer cooperation with the U.S. and other countries.

China is committed to the path of peaceful development. China calls on all countries to follow such a path and work to promote a new model of international relations featuring win-win cooperation, so as to foster a community of shared future for mankind. China will strengthen cooperation with other countries to jointly uphold the international order and system with the purposes and the principles of the UN charter at the core, and make the existing international order more just and equitable. Working together we can make the world a better place to live in.

Distinguished guests, ladies and gentlemen, friends, the S&ED and the CPE have played a significant role in increasing strategic mutual trust, expanding mutually beneficial cooperation, and deepening friendship among the people. I wish to express heartfelt appreciation to our teams and to people from all walks of life of the two sides who have taken a great interest in and acted to support the dialogues and the consultation. I hope that in the following two days, our teams will rise up to their responsibilities, make persistent efforts to build consensus, and produce more deliverables in the talks.

Xin Qiji, a poet in China’s Song dynasty, once wrote, “Thick mountains could not stop the river from flowing into the sea.” In fact, all rivers have to travel a meandering course before reaching their destination. For China and the U.S., as long as we stay focused on our goal and persevere in our efforts, we will be able to make even greater progress in building the new model of major country relationship and deliver greater benefits, not just to the people of our two countries, but to people of all countries in the world.

To conclude, I wish this round of the China-U.S. S&ED and CPE a complete success. Thank you. (Applause.)

MODERATOR: (Via interpreter) Ladies and gentlemen, please rise. Please rise as President Xijinping (inaudible) leave. (Applause.)

Please take your seat. We will now give the floor to Vice Premier Liu Yandong followed by Secretary of State John Kerry, Vice Premier Wang Yang, Secretary of the Treasury Jacob Lew, and State Councilor Yang Jiechi. (Applause.)

VICE PREMIER LIU: (Via interpreter) Secretary of State John Kerry, Secretary of the Treasury Jacob Lew, Vice Premier Wang Yang, State Councilor Yang Jiechi, ladies and gentlemen, friends, good morning. (Applause.)

Today we are here in the scenic Diyatoau State Guesthouse for the joint opening ceremony of the eighth round of the China-U.S. Strategic and Economic Dialogue, and the seventh round of the China-U.S. High-level Consultation on People-to-People Exchange. I wish to extend my warm welcome to Secretary Kerry, Secretary Lew, and the U.S. delegation. (Applause.) I also wish to express my sincere thanks to the hard work of both teams. (Applause.) China and the U.S. both attach great importance to this round of consultations and dialogues. President Xi Jinping attended a joint opening ceremony and delivered an important speech. President Obama sent a written message. The two presidents have raised high hopes and charted the course for our work. We need to follow their instructions and work together to ensure the success of this round of consultations and dialogue.

This year marks the sixth year since the inception of the China-U.S. CPE. Over the past years, thanks to our joint efforts, the consultation has made solid and fast progress. Within the CPE framework, we have altogether reached over 400 outcomes and agreements covering the seven main areas of education, science and technology, culture, sports, health, youth, and women. And the CPE was participated by a large number of the Chinese and American people, making it truly productive. We are glad to see that from the three 10,000 programs of the Chinese side to its new program involving 101,000 (inaudible) people from the U.S., 100,000 Strong Initiative to its 1 Million Strong Initiative, the CPE played a role of incubators in elevating our exchange and the cooperation to higher levels.

We have achieved success in CPE as evidenced by Friendship Volunteers program, the Young Makers Competition, cooperation on clean cookstoves, and our joint response to the Ebola virus. And all this has brought real benefits to our two countries and the people of the world. Most important, the CPE has set up a bridge for friendship and played an important role for increasing mutual understanding, deepened friendship, and building trust between our peoples. And it has also laid down a more solid and popular basis for the growth of bilateral relations.

Now China and the U.S. are acting in line with the important agreement reached between the two presidents to build a new model of major country relationship. To advance China-U.S. people-to-people and cultural exchanges, we will be able to ensure that the spirit of mutual respect and winning cooperation will become deeply rooted in the hearts of our people in a subtle and effective way, and to make the China-U.S. relations more resilient and dynamic.

This round of CPE focuses on cementing people-to-people and cultural exchanges for a better future (inaudible) increasing our people-to-people and cultural exchanges, and to ensure that the long-term and steady growth of the relations will go on from generation to generation. To this end, I wish to propose the following: We need to step up practical cooperation and cement the cultural basis for this new model of major country relationship. We need to implement the achievements reached in previous rounds of the consultations and to conduct more dialogues and cooperation, and China’s new programs involving 101,000 and 10,000 people, and the U.S. 1 Million Strong Initiative, and to set up a more (inaudible) for China-U.S. youth exchanges. We need to ensure the success of the Chinese-American year of tourism and put in place more reciprocal visa policies to encourage mutual visits. We need to work in an innovative and pioneering spirit and improve the CPE institution.

During this round of CPE, we will launch a number of new programs, including the exchange mechanism between the Chinese and U.S. universities and think tanks, the cooperative alliance for applied technology education, and the Zhangjiang Boston Enterprise Park in Shanghai. In the future, we will build more such platforms to set up an all-dimensional pattern for China-U.S. cultural and people-to-people exchanges, and to ensure that our people – in particular the young people – will play the role of bridges and pioneers in our people-to-people and cultural exchanges.

We must act like water droplets to promote sustained growth of China-U.S. people-to-people and cultural exchanges. There is no quick recipe for fast progress in people-to-people exchanges. We need to work in the spirit of water droplets piercing through the stones, and the spirit of an ancient Chinese man who is determined to remove the mountain that block his way. Therefore, we need to work persistently to encourage exchanges and mutual learning, and offer inspiration not only for China-U.S. relations but also for the harmonious co-existence between countries with different historical and cultural backgrounds, social systems, and those staying at different development stages.

Ladies and gentlemen, friends, the Chinese ancient people believe that a true gentleman must be resolute and broadminded because he has heavy responsibility and a long cause. Both China and the U.S. have the responsibility to move forward our exchanges and cooperation and make greater contribution to our bilateral relations, and the progress of human civilization. I am confident that with the personal involvement of our two presidents and with the joint efforts of both teams, this round of consultation and dialogue will surely achieve (inaudible) and add new dynamics and a positive energy to the growth of the China-U.S. relations. Thank you. (Applause.)

SECRETARY KERRY: Well, good morning, everybody, Ni hao. I’m happy to be here. We’re very grateful to President Xi for coming this morning and for opening up this Strategic and Economic Dialogue, and to all of his designated representatives – Vice Premier Liu, Vice Premier Wang, and State Councilor Yang, and to Secretary Lew, my colleague in this mischief. And to all of our American colleagues and to distinguished guests, to all of those of you who are here from civil society, please accept the greetings of President Obama and the American people, and our openness to the full measure of what can be accomplished in these next two days. We are very, very pleased to be here and we very much look forward to the hopes of both of our peoples that these two days of discussions will move our relationship forward.

I want to especially express my gratitude for the warm welcome that I received on my arrival yesterday. State Councilor Yang and I were able to engage in a series of frank discussions over the course of the wonderful dinner last night in – I think it’s Meeting House Number 18 if I’m correct – beautiful view and good, solid conversation. And I think we got the strategic track of this dialogue off on a good start.

Vice Premier Liu gave me a very special treat, which was a personal tour of part of the Forbidden City, the garden – the Qianlong Garden that has been under restoration, 230 years old, and I understand that it is a partnership between the Chinese Palace Museum and the New York-based World Monuments Fund that has helped to restore the elegance and the extraordinary beauty of this place. Frankly, I think our whole team interpreted the privilege of visiting that old palace and garden as an expression – a symbol, if you will, of the important development which is represented in the growing eagerness of Americans and Chinese to join forces for the benefit of both of our countries.

And I hope that in that same spirit, we will be able to reach new milestones in our discussions in as many areas as possible. I’m also confident that that can be the case because both of our leaders – President Xi and President Obama – have shown a very steady determination over these years to broaden our bilateral agenda with very practical and positive outcomes in mind. And President Xi just shared with us his sense of that progress beginning with his own important meeting with all of us at Sunnylands in California.

Climate change is a very clear example of the benefit of this dialogue we’ve been having. Seven years ago – and I was there as were some of you – at the Conference of the Parties in Copenhagen, the United States and China were on exactly opposite ends of key issues, and as a result, the entire negotiation failed. It literally crashed. But over the last three years, because we took the time to work together, because we opened our minds up to the possibilities, because we spent a lot of hours together working through the details, we were able to build up our climate cooperation. And in the end, we were able to reach a landmark joint announcement from our two presidents on our emissions reduction targets last December as a result of that. And you have no idea how many people came up to me and said – and I’m sure they said the same thing to Minister Xie – that if it weren’t for China and the United States coming together, Paris probably couldn’t have happened. So we came together behind strong action and virtually every major country joined us in adopting an historic agreement that will reduce greenhouse gases, curb the harmful effects of climate change, and most importantly, move the private sector with a major message that has come from 196 countries – that this is the direction we need to move in. That signal to the marketplace will unleash enormous amounts of capital investment that will produce new jobs, new opportunities. It would not have happened without our leadership and our cooperation.

Nuclear nonproliferation is another example. Together, we helped to negotiate the Joint Comprehensive Plan of Action and resolved the international community’s 10-year-long concern about Iran’s nuclear program, and we together removed a major threat to the stability of the Middle East and to the danger of proliferation. That example stands as a stark message to us about what is happening in the DPRK and the necessity of China and the United States to stand firmly and strongly together in the same way.

As you know, we recently worked together to adopt the strongest UN Security Council sanctions ever on North Korea in response to that country’s continued violation of past resolutions. And we believe it is imperative to keep the pressure on North Korea in order to halt any and all actions that threaten its neighbors and threaten the peace and security of the region. We were able to be successful with Iran. We’ve set the model. We can be successful ultimately with North Korea. There is no reason that any country in the world today, given the disposition of nations around the world, given the attitude of the Security Council, that any country needs to move to create nuclear weapons. The world is moving in the opposite direction and we need to show the same leadership we showed on climate change and Iran in order to succeed.

In 2014, we worked together to help stop the spread of the Ebola virus and end what could have become a global crisis where people were predicting that a million people were going to die by the Christmas of two years ago. Last year, we formally agreed to synchronize our actions on global development policy and on health policy. Now, we are working with the African Union to launch the Africa Center for Disease Control and Prevention at the beginning of next month.

So, together, my friends, we have made the protection and the conservation of our oceans a major priority, and we are going forward with measures to designate additional marine-protected areas and to fight pollution. Many people have asked me and said, “Why does the Secretary of State – why are two big countries working on something like the oceans?” And the answer is that life itself on Earth depends on the oxygen that comes from the oceans, the food that comes from the oceans, on the health of the oceans, and our climate is set by the currents and the movements of the ocean. So later today, State Councilor Yang and I will meet a group of “Blue Pioneers,” as we call them – students of conservation supported by a partnership between the Chinese and American foundations, and that is another sign of increasing collaboration between our countries.

We continue to work together to advance efforts to curb illegal wildlife trafficking, including a nearly complete ban on trade in ivory.

My friends, the list goes on, and I won’t go through all of it. But I really look forward with our team to joining you in our sessions in the next two days in order to work on that list.

Now, we all know there are, as President Xi just said to everybody – and he was very upfront about it and we appreciate that, and very reasonable in the way in which he suggested we should deal with it – and that is there are areas of disagreement or lack of resolution on one issue or another that exist between us. And it is absolutely vital that we use this meeting in good spirit, in good faith, constructively, to work on those differences – whether they are on human rights or on maritime security or fair trade or cyber or government transparency. The S&ED is one of the best opportunities that we have to discuss our differences and to seek creative ways to narrow them or to eliminate them altogether. That is how we turned climate change from something we were opposed to together to something we worked on together into a remarkable partnership. And that is how we can fulfill our mutual duty as the world’s two largest economies – nations with very high global expectations and responsibilities.

In that vein, the United States will make it clear that we are looking for a peaceful resolution to the dispute – the disputes of the South China Sea. We are not a claimant. We have taken no position on any of the claims of any claimant. The only position we’ve taken is let’s not resolve this by unilateral action; let’s resolve this through rule of law, through diplomacy, through negotiation. And we urge all nations to find a diplomatic solution, rooted in international standards and rule of law.

Finally, we should bear in mind that nothing does more to assist our official deliberations than the involvement of our people – your people, our people, as they are represented through grassroots organizations in the United States and in China. After all, that’s the purpose of government – to represent the people and to meet the needs of our people, both of us – even though, as President Xi said, we have different systems, different culture, different history. We acknowledge that. We respect that. But the value of our ties is most clearly respected and reflected in outside-of-government meeting rooms – in busy work places, academic settings, scientific laboratories, music halls, athletic fields, and in the freedom of daily communication between our people, which President Xi referred to, and the numbers of people who are going back and forth between our countries. That is where the health and security of our future relationship will find its truest measure, and that is where the most telling of our official policies is ultimately going to be played out.

During our dialogue last year, Vice Premier Liu referred to a Chinese saying that “even a thousand-story tower starts with small piles of Earth.” My message today is that we should be ambitious in building that tower.

I know President Obama shares that ambition and he understands the stakes of this dialogue and exchange. As he wrote in a letter to President Xi on the occasion of this S&ED, he said, “I am committed to cultivating a relationship that improves the lives of both of our nations’ citizens by making the air they breathe cleaner, the energy they consume more sustainable, the economic opportunities they reach for more abundant, and the world in which their children grow up safer.”

As diplomats, we all know that it is always very easy to just repeat the past statements of others rather than try to address the hard questions and resolve areas of tension. But the reason our leaders initiated this dialogue is because of the incredible potential for further growth and cooperation between China and the United States. Sustained growth, however, requires a willingness to constantly ask ourselves whether or not there is more that we could do or there’s something we could do differently, to ask ourselves whether obstacles to progress can be overcome, or fresh opportunities – with a little more daring – that we might be able to explore them together.

Above all, let me say this: It is vital that we do not allow old thinking – the vestiges of the Cold War and rigid ideological doctrine – to force us in the wrong direction, either of us, or to stand in the way of 21st century possibilities and realities. I just heard President Xi tell us how the globalized world is one that is moving more rapidly than ever before. Yes, it is. He is absolutely correct. And that makes governing more complicated. It also makes the relationship between two strong nations and strong economies like ours more important. The globalized world of this era requires cooperation, not conflict.

And all through its long history, China has contributed in so many ways – in the arts, in the sciences, in literature, in philosophy, and most recently, obviously, for decades now, in the workings of the UN Security Council in global politics. I am proud to say that in a much shorter span time – because we are a younger nation – the United States has worked hard to similarly contribute to the global order and structure, and to bear the burden of responsibility.

Now, we have a chance – we really do – to define a new relationship. We have an inescapable responsibility – a shared duty – to lead in the direction of stability, prosperity, and peace. And it is up to us and to our successors to ensure that America and China are more partners than rivals, more in agreement than disagreement about the rule of law, more in harmony than at odds over priorities, and more confident with each passing year in each other’s intentions. That’s how you build trust.

This dialogue can help us to fulfill that responsibility through a candid exchange of views, an explanation of the positions we hold, and a good faith search for additional areas of common ground and common effort. And I look forward to very fruitful and productive conversations.

Thank you all. (Applause.)

VICE PREMIER WANG: (Via interpreter) Secretary of State Kerry, Secretary of Treasury Lew, Vice Premier Liu Yandong, State Councilor Yang Jiechi, ladies and gentlemen, good morning.

Just now, President Xi delivered an important speech in which he recognizes the long way the S&ED has gone through in the past three years, and he expressed his high hopes for this round. President Obama also sent his personal (inaudible). The Chinese economic team will, as expected by President Xi Jinping, work together with the U.S. team for a most productive round of dialogue this time.

The S&ED is a high-level, all-encompassing dialogue mechanism that our two countries have established. It is a symbol of the maturity of bilateral relations and it serves the interests of both of our countries and beyond. Thanks to the concerted efforts, the dialogue agenda keeps expanding with more deliverables coming out year by year. The last seven economic dialogues produced 469 outcomes. Among them, over 250 outcomes were achieved in the last three economic dialogues by this government, and many of them are really meaningful outcomes.

At the fifth dialogue, China agreed that on the basis of the pre-establishment national treatment and negative list model, launched the substantive negotiation of the China-U.S. BIT. At the sixth dialogue, the two sides coordinated positions on the ITA expansion fossil fuel subsidy peer review, which created favorable conditions for the resumption of the plurilateral negotiation of ITA and advancing the climate change negotiation.

As the sixth – seventh dialogue, the two sides had effective communications on the IMF quota reform plan, the RMB joining the SDR, and other issues which strongly boosted China-U.S. cooperation in international financial system and the improvement of the international economic governance structure.

President Xi in his remarks stressed that trust stands as the basis of relationship among people and provides a prerequisite for state-to-state exchanges. We need to maintain frequent communication and build up strategic mutual trust in order to avoid strategic misjudgment. The S&ED, with its broad agenda and participation and multiple channels for dialogue, serves as the direct line of communication for China and the United States, two major countries with a different development stage, history, and culture, and social system that enables our two countries to build trust and reduce misjudgment.

Right now the presidential campaign in the United States is in full swing and candidates of both parties are often making economic and trade issues between our two countries an issue. However, China is (inaudible) because we know that we are able to get the true picture through this dialogue mechanism, and we can avoid misjudgment.

Likewise, through dialogue, the United States has gained a deeper understanding of China’s reform process, thus reducing its misreading of the economic situation in China. It is the intangible value of the dialogue and its significance often goes beyond specific deliverables. The dialogue not only helps us manage differences; more importantly, it has promoted cooperation. In the past eight years, U.S. exports to other countries grew by 12 (inaudible) percent, but its export to China grew by 63.7 percent. Last year, for the first time, China became the United States’ largest trade partner. Stock (inaudible) investment exceeds 160 billion (inaudible). In the first four months of this year, U.S. investment to China was up by 133 percent.

For the past couple of months, I met with senior leaderships of Cisco, Apple, Microsoft, and other big businesses. They are very confident about China’s market, and that’s why they are expanding their investment and cooperation in China. Our business ties between provinces in China and states in the United States are closer. Twenty-five Chinese provinces and municipalities and seven states and cities in the United States have set up a joint working group on trade and investment cooperation. In the past 10 years, export to China from 40 U.S. states has more than doubled. For five states, it has even quadrupled. Chinese companies are investing in 44 states in the United States, creating over 90,000 jobs for the local community.

That said, we don’t shy away from differences on many economic and trade issues. We (inaudible) rather big differences. However, what we have achieved with dialogue shows (inaudible) to handle differences, and cooperation is the only viable choice (inaudible). (Inaudible) working and dealing with China for years, in their article, “Why the U.S. Needs to Listen to China,” say that by addressing each other’s chief economic criticisms, China and the U.S. would simultaneously improve their own economies, remove irritants to their relationship, and foster trust. For cooperation between China and the United States to happen, perhaps the most crucial challenge will be to first look within. This is a proposal of reason and goodwill.

We look forward to working with the United States to make sure that this round of dialogue will be a most productive one, and jointly we can together write a new chapter of China and U.S., two great nations endeavoring to build trust, manage differences, and expand cooperation. Thank you. (Applause.)

we look forward to working with the United States to make sure that this round of dialogue will be a most productive one, and jointly, we can together write a new chapter of China and the U.S., two great nations endeavoring to build trust, manage differences, and expand cooperation. Thank you.

(Applause.)

SECRETARY LEW: Thank you very much. On behalf of President Obama, Secretary Kerry (inaudible) delegation. In particular, Vice Premier Wang (inaudible) thank you so much for hosting the state between our nations. These discussions continue to raise the level of bilateral cooperation between our two nations, and we look forward today for (inaudible) and tomorrow for another important set of discussions. As co-chairs of this event for the past three years, Vice Premier Wang and I have worked closely to help strengthen our economic ties, and in the process have developed a close, personal working relationship. It’s been a true pleasure to serve alongside such a constructive counterpart. While at times we have different perspectives, and we do not always choose the same approach, we’ve always been able to make progress, because our work together is guided by shared respect, and a shared belief that it’s vital to create tangible results for the citizens of our two countries. The benefits of partnerships like these were apparent since the inception of this dialogue. And although this will be the last S&ED of the Obama Administration, I believe our record demonstrates why it’s so important that such bilateral – productive bilateral engagement continues. Working closely together has enabled us to better understand our differences and to identify areas where we can expand cooperation, where common ground on compatible interests can be found. Equally important, our interactions have built a strong foundation so we’re better able to narrow our differences and make progress even on the more difficult issues where we disagree.

Our discussions over the next two days will cover a range of issues important to both the American and the Chinese people. We’ll discuss ways to promote strong, sustainable, and balanced growth; how we can improve financial sector function and stability; create opportunities for our companies and workers in each other’s – to compete in each other’s markets; and uphold our joint responsibility of strengthening the international economic system and its high standards of governance. We also look forward to efforts by the Chinese authorities to make progress on a number of priorities of the United States, including to reduce Chinese excess industrial capacity, improve data and regulatory transparency, and lower barriers to trade and investment.

Together, the United States and China account for a third of global GDP and nearly 40 percent of recent economical growth. Our countries have an enormous stake in each other’s economic success. And as the world’s two largest economies, our policies and economic management will not only shape the prosperity of our own people; they will structurally shape the health and development of the global economy as well.

The American economy continues on a path of steady growth. After seven years of sustained growth, key underlying economic indicators show that this positive trajectory will continue going forward. With the unemployment rate near an eight-year low, improved labor market conditions are boosting household incomes, and consumer confidence is near record levels that prevail – near levels that prevailed prior to the Great Recession, but with considerably lower levels of household debt.

While slowing, China’s economy continues to be among the fastest-growing in the world. The successful implementation of China’s economic reform agenda – which we will be discussing – will be essential to continued growth. As China undergoes a challenging economic transition, implementing reforms that lead to greater openness and give the market the decisive role in allocating resources will support a successful shift towards a more sustainable economic model and a better medium and long-term economic outlook.

As China charts its course, we recognize our shared interest in the pursuit of policies that support sustainable growth. We see China’s stated reform goals as complementary to the agenda for our bilateral economic engagement. And we hope to focus our plans to implement those reforms to achieve the potential benefit they promise for the future.

Consistent with China’s reform agenda, the United States supports efforts to reduce excess capacity and leverage in the economy and allow market forces to determine the allocation of resources. Excess capacity has a distorting and damaging effect on global markets and implementing policies to substantially reduce production in a range of sectors suffering from overcapacity – including steel and aluminum – is critical to the function and stability of international markets.

We were pleased to see the reforms made last year and the recognition of that progress in the IMF decision to include the RNB in the SDR basket. Again, in line with China’s reform agenda, we also support development of Chinese capital markets which create conditions to move further toward a market-determined exchange rate and the adoption of prudent bankruptcy resolution standards. And as a broad policy matter, it’s also important that China use its fiscal and lending policies to support stronger consumer demand since growing consumer demand is essential for a successful economic transition.

China has benefited enormously from opening up to and integrating with the world economy. All sectors were instrumental in this successful integration, including nongovernmental organizations. NGOs have served to strengthen our bilateral relationship and it made new forms of cooperation possible. They helped to nurture innovations, to address critical human needs, and their work allows for larger economic success.

We’ve been concerned that China’s recently passed foreign NGO management law will weaken that foundation by creating an unwelcome environment for foreign NGOs. President Obama and President Xi have discussed this issue, and addressing it will be important for our bilateral relationship.

China’s G20 presidency this year symbolizes its growing global economic standing. We support a greater role for China in the existing international economic architecture and expect that China will continue to take on more responsibility in maintaining and advancing the high standards of existing multilateral institutions. To those important ends, continued cooperation between the United States and China on the diverse set of issues covered in the S&ED is crucial.

Over the past 10 years of this dialogue, through candid engagement and debate, we’ve demonstrated and reaffirmed our ability to manage our differences effectively and make progress toward improving the livelihood of American and Chinese citizens. I’m proud that we’ve made concrete progress with China in areas like promoting the rule of law, strengthening exchange rate transparency and regulatory transparency, upholding the high standards of the international financial architecture, opening markets and technology and environmental sectors, and furthering economic and financial reforms. It’s important that such progress continues in this eighth round of the S&ED and beyond.

And I’d like to thank Vice Premier Wang for his partnership on these issues. We look forward to productive discussions over the next two days as we work together to tackle the mutual challenges that we face.

Thank you very much. (Applause.)

STATE COUNCILOR YANG: Secretary Kerry, Secretary Lew, Vice Premiere Liu and Vice Premiere Wang, ladies and gentlemen, friends, it is my great pleasure to join you at the beautiful Diaoyutai State Guesthouse in (inaudible) for the new round of China-U.S. S&ED and CPE. I would like to warmly welcome Secretary Kerry, Secretary Lew, and other American colleagues. Yesterday evening, I had the opportunity of having a working dinner with Secretary Kerry. We had a very candid and positive exchange of views on our bilateral relations, and both sides agree that we should continue to build the new model of major country relationship between China and the U.S., and we also believe that since the Sunnylands meeting between our presidents three years ago, building on the agreement of our presidents of building the new model of major country relationship, we have come a long way in our bilateral relations.

Ladies and gentlemen, just now, President Xi delivered an important speech of great vision and far-reaching significance, and Secretary Kerry read parts of the written message of President Obama. Both Chinese and American presidents expressed high expectations for this round of S&ED and CPE and pointed the way forward for our teams. We meet at a time when the world is (inaudible) in complex and intractable regional hotspots and the numerous global challenges. The whole world is watching China and the United States, how we handle our bilateral relations, and whether we can demonstrate strong leadership for world peace, stability, and prosperity.

China and the United States now shoulder greater common responsibilities, and have broader room for cooperation. We need to, as instructed by our presidents, act in the fundamental interest of people of our two countries and beyond; have candid and in-depth exchange of views on important bilateral, regional, and global issues; increase mutual understanding, deepen strategic mutual trust, actively seek common ground, and inject new impetus into our bilateral relations. We need to be good listeners, try to think from the other side’s perspective, respect each other’s’ core interests and major concerns, properly handle sensitive issues so that the S&ED will be not just a platform for greater mutual trust and cooperation, but also a place where misperceptions and disagreements can be resolved.

China is firmly committed to peaceful development. At the same time, we expect other countries to do the same. Anyone who view China in a objective light can come to the conclusion that China upholds the sovereignty, (inaudible) and dignity of our country. China contributes its share to regional peace and stability and development. On the South China Sea issue, back in 2002, China and ASEAN countries signed the DOC. Paragraph four of the DOC made it clear that countries involved should have friendly consultation and negotiation to resolve their disputes, and other signatories of the DOC should give active support to that. In fact, since then, a lot of countries in the world have expressed (inaudible) and China and ASEAN countries are now conducting intensive consultations building on the DOC, following the principles of consensus building, and make preparations for the conclusion of the COC. We have made important progress in this regard. For example, the various countries have reached a lot of common understanding on the elements of the COC.

All in all, we believe that peace of the world and the Asia Pacific are extremely important. China participates in and contributes to the world international order. China is the staunch supporter of peace, stability, and development in the Asia Pacific and beyond. We believe as long as we stick to the dual-track approach, we will be able to properly handle the South China Sea issue, and we also look forward to active support from other countries.

As for other disagreements between China and the United States, we hope the US can also prudently and properly approach our disagreements in this spirit, and we will work with the US in the same direction. We need to treat each other with sincerity (inaudible) expand cooperation in economy, trade, mil-to-mil relations, counterterrorism, nonproliferation, cyberspace, law enforcement, energy, and environmental protection. We need to increase communication on Korean nuclear issue, Iranian nuclear issue, Iraq, Syria, Afghanistan, and other regional hotspots; and deepen joint actions on climate change, developmental assistance, public health, ocean conservation, peacekeeping, and other global issues so as to bring more benefits to our peoples and create more public goods for the world.

There’s an ancient Chinese saying, “Time refuses to stay. It passes us by like rivers.” We need to seize every hour, work together for as many outcomes as possible in this round of S&ED and CPE, and live up to the high expectations of our presidents and our peoples. And thank you very much.

(Applause.)

# # #