Background Briefing on the U.S.-China Strategic and Economic Dialogue

Special Briefing
Office of the Spokesperson
via Teleconference
June 22, 2015

MODERATOR: All right, thank you very much, Steve, and thanks to everyone for joining us today. As Steve said, this will be a call on background; it will be attributed – attributable to a senior State Department official – no names or titles please. But just for everyone’s awareness, the person we have with us today is [Senior State Department Official]. But again, from here on out, refer to [Senior State Department Official] as a senior State Department official.

And today’s call will be about the Strategic and Economic Dialogue, and with that, I will turn it over to our speaker for a few introductory words and then we’ll get to your questions and we’ll – we’ve got about a half an hour today, so we’ll try to get to as many questions as we can.


SENIOR STATE DEPARTMENT OFFICIAL: Hey, good morning, everybody. Hope you all got a little bit more rest this weekend than I did. So I’m here today to talk about the upcoming Strategic and Economic Dialogue with – between the United States and China. But we also have a number of other meetings going on this week, and I understood that some of the people on the call at least wanted to get a kind of a primer on the whole sort of next three days of events. So I’m going to try to do that for you in my opening comments. I’m not trying to go on for too long, but I want to make sure that you all have a good basis for understanding both what’s going on sort of physically here, and also what we’re trying to get done over the next few days.

So with that, let me just mention we have three major U.S.-China dialogues this week. We have the Strategic Security Dialogue, which is known also as the SSD – I’ll try to minimize the acronyms, but just for your understanding; the Strategic and Economic Dialogue, of course, the S&ED which is the biggest dialogue we have; and then we also have concurrently with those two this year the Consultation on People-to-People Exchange, which is also called the CPE.

The S&ED, or the Strategic and Economic Dialogue, is our premier, regularly-scheduled, bilateral dialogue with the Chinese Government, and this year is the seventh round of this dialogue, and it includes a whole bunch of interactions at the working and highest levels of our governments. So the Strategic and Economic Dialogue includes a number of sub-dialogues. The reason why the Strategic and Economic Dialogue is so important for us in U.S.-China relations is that it brings together very high-level officials on both sides, which is important in our interaction for making sure that we have clear communication and get our messages across to the highest levels of the Chinese Government. It’s also important because it brings together the interagency on both sides. So there’s tens of agencies in the U.S. Government and the Chinese Government that participate in these talks and that have side meetings around these talks. And this is important also for our communication with China because of the ability it gives us to break through stovepipes in the government there and reach across agencies and deliver messages to people outside of our normal channels of communication.

The other reason why it’s important to have this dialogue every year is that it ensures that we continue to have deep discussions on important issues so that we can keep making iterative progress in the relationship on these issues. There are a number of other major events taking place alongside the S&ED this week, as I mentioned, and there are about 400 Chinese officials here from every major Chinese agency.

So first I wanted to talk a little bit about the Strategic Security Dialogue, which is happening today at the State Department. In keeping with past practice, this year’s Strategic Security Dialogue will consist of three small working sessions and a working lunch led by Deputy Secretary Tony Blinken and executive vice foreign minister from the Chinese side, Zhang Yesui. And then also in that dialogue, our senior military counterparts to the civilian side. So the Strategic Security Dialogue is actually the highest-level civilian-military conversation that we have with China during the year. And they tackle a full range of strategic security issues and really try to get at those issues which are the most likely to drive strategic mistrust between the U.S. and China.

So just to give you an idea of the schedule for this dialogue and the events, last night Deputy Secretary Blinken hosted a welcome dinner at DBGB. Today we started at 8:30 and there will be the three sessions and a working lunch to finish in mid-afternoon. The topics will cover maritime and strategic issues such as cyber security, mil-mil relations, missile defense, nuclear policy, and space security. The working lunch will focus on regional and international issues such as North Korea, Iran, and Afghanistan. And I won’t get into the details of the diplomatic discussions so far, but they’ve been candid and to the point in dealing with issues where we disagree and are very good for trying to find ways to narrow our differences on these most sensitive issues in the relationship.

We also reiterated, of course, our concerns about China’s behavior in the South China Sea, and stressed that substantive diplomacy is the proper way to resolve disputes among the claimants in this region.

I’m going to switch now to the description of the Strategic and Economic Dialogue. Beginning with a dinnertonight, this dialogue is the one that brings together dozens of high-level Chinese Government officials from across their cabinet with our highest-level officials to discuss almost every issue that we have in the bilateral relationship. It provides an opportunity to take stock of our progress, to set new goals, and to deepen cooperation on those areas of mutual interest while we speak candidly about areas of difference and try to resolve and narrow those differences.

Over the course of the next two days, Secretary Kerry and State Councilor Yang Jiechi will co-chair the strategic track of the dialogue, while Treasury Secretary Lew and Vice Premier Wang Yang co-chair the economic track. We will also have cross-cutting discussions on combatting climate change and promoting sustainable development; countering pandemics, such as Ebola; and also on conserving oceans and wildlife. And we hope to make progress on issues that are critically important to the United States including climate change, environmental protections, cooperation on nonproliferation challenges, and human rights.

This evening Secretary Kerry and Secretary Lew will host small dinners for their respective counterparts out at Mount Vernon, home of George Washington. And that will kick off this year’s Strategic and Economic Dialogue. Tomorrow, the opening session of the dialogue and the Consultation on People-to-People Exchange combined will be held at the State Department, and there will be an open press event on climate change, known as our “Act On Climate” event, which will follow the opening session. And then after that the private session to have discussions on climate change will ensue in one of the meeting rooms upstairs in the State Department.

Secretary Kerry will also lead a working lunch to discuss regional hotspots and global issues, and following the lunch we’ll have two smaller meeting sessions to discuss bilateral issues, and also our interactions in the Asia Pacific. Separately tomorrow, Deputy Secretary Blinken will host a special session on development cooperation that will include many agencies from across the Chinese and U.S. governments, and the daytomorrow will conclude with the joint banquet. That will include both the strategic track and the economic track, but also the participants from the People-to-People Exchange. The theme of the banquet dinner, which will feature American summer fare, is “sharing our culture.”

And then on Wednesday, June 24th, the day will kick off with a CEO roundtable event at Blair House with a number of Chinese and U.S. CEOs, and both the strategic and economic track participants will come together for attending that.

Following that, Secretary Kerry and State Councilor Yang Jiechi will make some remarks at the cross-cutting session on preserving our oceans at the State Department. This is a new session for us, which we think is going to be helpful in exploring ways that the U.S. and China can cooperate on conserving and protecting maritime spaces.

This session, the ocean session, will be followed by the strategic track plenary session at the State Department. This will be a sort of a – open to press at the beginning session, which will consist of a number of readouts of other events that have gone on over the last couple of days. And after that plenary session, Secretary Kerry will host Vice Premier Liu Yandong, who is the chair for the Consultation on People-to-People Exchange, and will begin that part of the program.

Before I describe in a couple words the people-to-people exchange, let me just run through – in addition to the formal sessions, there are a number of side meetings and sessions being held on everything from innovation to South Sudan. And so some of these will be open to the public, but one of them is the public event on wildlife trafficking at the State Department on Wednesday afternoon.

The people-to-people exchange component will begin, then, on Wednesday at lunchtime. Secretary Kerry will host Madam Liu Yandong and the heads of the six working groups on exchanges. We have working groups in culture, sports, health, education, science and technology, and women’s issues who will be meeting all day tomorrow. And then following the lunch meeting with Vice Premier Liu, there will be a plenary session on the people-to-people exchange part of the program where the different working groups will present on the various exchanges that they’ve been able to promote and the results of their action plans for the last year.

That will pretty much wrap up the program here at the State Department. The three co-chairs of these various events on the Chinese side – so State Councilor Yang Jiechi, Vice Premier Liu Yandong, and Vice Premier Wang Yang – will then have a meeting at the White House with the President on Wednesdayafternoon. And then following that, we will have the joint press conference back here at the State Department on Wednesday early evening.

So with that, I’m happy to sort of answer any questions you have on either process or other schedule matters or anything else you want to ask about.

MODERATOR: Okay. And so Steve, if you (inaudible) folks how to (inaudible) the question queue, that would be great.

OPERATOR: Certainly. Ladies and gentlemen, if you have a question or a comment, please to press the * followed by the 1 – *1 for any of your questions or comments.

Our first question will come from the line of Elise Labott of CNN. Please go ahead.

QUESTION: Thank you so much for doing this. It sounds like a real large kind of program. And I’m wondering if you can kind of talk about a few of the elephants in the room. I mean, clearly, 400 Chinese officials coming here and the breadth and depth of the working groups show that the U.S. and China are looking for a deeper and more meaningful relationship. But if – you made reference to China’s activity and the Law of the Sea, you had U.S. overflights and China’s warning about that, and then you also had the Chinese hacking issue.

And I’m wondering, while you have the breadth and depths of a – of working groups and activity, how much these two really strong irritants are – not overshadowing, but clouding the talks in any way, and how much can you really advance the relationship when there’s so much tension behind the scenes? Thank you.

SENIOR STATE DEPARTMENT OFFICIAL: Yeah, no, that’s a very good question. I think – look, the relationship between the United States and China is extremely broad. It’s also extremely complicated. But it’s very consequential, and I think the way we look at it is we have agreed with the Chinese that we are going to try to expand those areas where our interests overlap and expand cooperation in those areas. And there are a whole number of them, many of which I mentioned and many of which I didn’t mention. But certainly on the docket for the talks for the next few days we’ve got prominently featured things like climate change, which we’re working toward the December negotiations in Paris to try to get an agreement. We’re working obviously very closely with the Chinese on the P5+1 negotiations on the Iran nuclear issue. We’re cooperating with them on trying to bring prosperity and stability to Afghanistan. So there are a lot of areas that are very important for our cooperation, and there are many more that I didn’t mention just now.

Of course, the other part of the relationship with the Chinese and what we’re trying to do is to show that we can effectively manage areas of ongoing difference, and – sorry – work to narrow those differences over time.

And I think that is one of the main reasons, actually, why the Strategic and Economic Dialogue has been so important, and also the Strategic Security Dialogue. The fact that we have these kinds of very high level engagements every year now for the past seven allows us to really hit those areas of difference that we have sort of ongoing disagreements in. And you mentioned a couple that we think of from the U.S. side as sort of ongoing irritants. The Chinese have a couple on their side as well that they like to raise.

And so I think the talks are all the more important for the need to address these issues head-on, not try to paper them over, not try to agree to disagree, but to try to actually talk about them and see if we can in particular kind of try to narrow the differences, but certainly at least make sure that we’re communicating clearly on the areas of difference so that we don’t miscalculate, misunderstand, et cetera. I mean, the relationship is crucially important in so many areas, and we want to make sure that we’re hitting at all the problem areas very directly.

MODERATOR: All right. Thank you. And we’re ready for the next question.

OPERATOR: Our next question comes from the line of Nicole Gaouette of Bloomberg News. Please go ahead.

QUESTION: Thanks so much for taking the time to do this call. I just wanted to follow up on Elise’s question. You didn’t mention cyber security specifically. I’m wondering if there is a working group or an event that is going to focus on that issue, and what the Administration’s message is going to be, especially vis-a-vis the OPM hack.

SENIOR STATE DEPARTMENT OFFICIAL: Yeah, thanks. So the issue of cyber security – I mean, it’s certainly featured prominently, actually, in the agenda for the Strategic Security Dialogue which is going on, actually, right now in – at the State Department upstairs. It’s been a topic on the agenda for the Strategic Security Dialogue for the last, I think, six years. So it’s not a new issue. Of course, some of the revelations are fairly recent, and those will certainly be talked about in very direct terms, both at the Strategic Security Dialogue, but also in all of the other sort of tracks where we have a chance to raise these issues, both in the strategic track of the S&ED but also in the economic track.

And so I think what you’ll see is that in sort of working through these issues and making sure we have clear communication with the Chinese on our concerns about cyber security, we’re able to raise it both with officials in the security side of the Chinese Government, but also with officials in the economic side of the Chinese Government to make sure that it is clear what we’re communicating and the implications of what we’re talking about in – for both security and economic officials on the Chinese Government. They don’t always necessarily look at questions from the same perspective, and we want to make sure that we’re getting through to both of those sides.

MODERATOR: All right, thank you. Next question.

OPERATOR: Our next question comes from the line of Matthew Pennington of the Associated Press. Please go ahead.

QUESTION: Yeah, hello. Thanks for doing the call. I just have a very brief follow up question to the previous one. Will the U.S. directly speak to the Chinese about the theft of data from the Office of Personnel Management?


MODERATOR: I’m sorry, can you repeat the question?

QUESTION: Will the U.S. side directly ask the Chinese about the theft of data from the Office of Personnel Management?

SENIOR STATE DEPARTMENT OFFICIAL: So, of course, as you know, we haven’t talked in terms of attribution on the part of the U.S. Government with respect to the OPM intrusions. But there’s been plenty of public domain information that has been out there on this issue, and certainly the issue will be addressed, I think, in pretty direct terms with the Chinese.

OPERATOR: The next question will come from the line of Margaret Warner of PBS NewsHour. Please go ahead.

QUESTION: Oh, hi. Thank you for doing this. Let me go back to the second question and the third question about cyber security. You said that these issues have been raised for like – for the last six or seven dialogues. Yet the penetration seems to be worse, the hacking seems to be worse. So what really is achieved other than communicating the U.S. displeasure over this? Can you point to anything that – in Chinese behavior that has been curbed because of these dialogues?

SENIOR STATE DEPARTMENT OFFICIAL: So when I said that we’ve been talking about cyber security and the Strategic Security Dialogue for the last six years, what I mean is it’s a topic on the agenda. So it’s an ongoing area of discussion. We have this week up at the UN in the group of governmental experts, there’s a discussion going on with U.S. and Chinese experts on trying to come up with global norms for behavior of governments in cyber space – the kinds of norms that we have in other fora for things like arms control, et cetera.

So we have had discussions ongoing with the Chinese in multilateral fora, in bilateral fora about all of the various aspects about cyber security, the activity of IT companies in China, in the United States, et cetera. It’s a very wide-ranging, obviously, topic. It’s a fast-changing area, and it’s an ongoing topic of discussion. We’re the two biggest users of the internet. We both have huge global sort of interests in seeing the internet be secured. I understand that iPhone – more iPhones were sold in China last year than in the United States. So it’s a huge area of interest for both of our countries, and we have ongoing conversations about all aspects.

MODERATOR: All right. We’re ready for the next question.

OPERATOR: Our next question comes from the line of Jo Biddle of AFP. Please go ahead.

QUESTION: Hello, good morning. Thank you very much indeed. I wondered if I could pose a sort of broader, more general question. Given that your countries – China and the United States – are the world’s two leading economies and given that you have open disagreements about things like the South China Sea and what is happening there and China’s claim to most of that key waterway, I wonder if you could describe for us how you view China on the global stage. Is it a global partner with the United States, or is it not more – is the reality not more that it’s actually a competitor for the United States? Thank you.

SENIOR STATE DEPARTMENT OFFICIAL: Yeah, so I think I kind of got at this question in my earlier answer, which is that there are many, many, many issues and challenges around the world that can best be resolved by U.S.-Chinese cooperation. And in those areas where we have overlapping interests to resolve those issues, we are working very closely with the Chinese to try to do so. Of course, it’s natural that there are going to be areas of competition. I mean – and we have areas of competition with many of our closest partners and allies, and I don’t think that that would come as any surprise to anyone.

We have areas also of continuing difference, and I don’t think competition is necessarily the same thing as an area of difference. I mean, healthy competition is really what we’re all about. So I think the areas of difference are some of those that I’ve alluded to. I mean, of course, we have continuing differences on the area of human rights as well, which is a longstanding concern. And we’re going to use these talks to address those and try to see if we can find a basis for better communication on some of those issues and try to narrow the differences if we can. It’s a process. On some issues it’s a fairly extended process, but it certainly is the case that we need to be communicating about all these issues.

MODERATOR: Okay. We’re running short on time, so we’ll try to do as much we can in the time left. Please, next question.

OPERATOR: We have a question from the line of Barbara Usher of the BBC. Please go ahead.

QUESTION: Thank you. My question was about cyber security, so it’s been, in essence, answered. But just – could you clarify whether the mechanism set up to discuss cyber security issues is still canceled, which is what the Chinese did, I believe, after the indictment of the five military officers last year or the year before? And then could you also just tell us what are the topics that the Chinese raise as irritants?

SENIOR STATE DEPARTMENT OFFICIAL: Okay, so I think on cyber security the question was about whether or not the dialogue is still suspended, which happened last year after the indictments. And the name of that dialogue or that group was the cyber security working group, and indeed that group has not met since last year.

However, that’s not to say that we don’t have any number of open communication channels with the Chinese to discuss cyber issues. I mean, the Strategic Security Dialogue going on today is one of those that’s at a very high level, but we’ve had ongoing conversations at other levels through experts and through also the group of governmental experts in New York on cyber issues. So I wouldn’t say that there’s been no communication on cyber issues, but the working group that you mentioned, yeah, it continues to not meet.

On the second part of the question – oh, on – you mean what do the Chinese raise on – for their part in the dialogue? Well, they have a whole number of things that are a priority for them in the U.S.-China relationship, things including military-to-military confidence-building measures, economic advancement, and continued open trade and promotion of investments. They’re also interested in working with us on regional issues like – Afghanistan I mentioned, Iran. And so we also talk about all of the things that they raise, obviously.

MODERATOR: Okay, I think we may have time for just one more, Operator.

OPERATOR: Our last question in queue, or that time permits, will come from the line of Pam Dockins of Voice of America. Please go ahead.

QUESTION: Thank you for doing this. First to follow up regarding Barbara’s question about irritants, one of them that you mentioned for China’s side was military-to-military confidence building. Can you elaborate a little bit on what you’re referring to there?

And then secondly, more of a logistical question: The event this evening at 5:30 with Energy Secretary Moniz here at State, can you explain a little bit more? Is this going to be a reception? Is it a major speech? I know this is, like, prior to tomorrow’s dialogue, but if you could shed more light on what will happen in this session, we’d appreciate it.

SENIOR STATE DEPARTMENT OFFICIAL: Thank you. Yeah, so I didn’t mean – in the list that I mentioned, I didn’t mean that those were all irritants from the Chinese side. Those are more the things that they raise that they’re trying to push forward and make progress on. So I didn’t mean that mil-mil confidence-building measures is an irritant from their side. That is something that they are prioritizing.

As far as the event this evening out at Mount Vernon, that is more of a welcome dinner and a discussion of strategic bilateral issues. There will be two small dinners: one for the strategic track with Secretary Kerry and his counterpart, State Council Yang Jiechi, and a number of other high-level U.S. officials; and then there will be another dinner for Secretary Lew with his counterpart, Vice Premier Wang Yang. So it’ll be more of a small, private event to discuss in general the strategic direction of the relationship, what we’re going to get done in the next couple of days, and where we see the relationship going over the sort of near-to-medium term.

MODERATOR: All right. I’d like to thank all of our people who called in today and for the questions, and especially to thank our speaker today. And once again, this call has been on background attributable to a senior State Department official. And we look forward to keeping in touch and appreciate your participation. Have a good day, everyone. Thanks.