Joint U.S.-China Press Statements at the Conclusion of the Strategic & Economic Dialogue

Joint Statement
John Kerry
Secretary of State
Secretary of Treasury Jacob Lew, Chinese State Councilor Yang Jiechi, and Chinese Vice Premier Wang Yang
Great Hall of the People
Beijing, China
July 10, 2014

MODERATOR: (Via interpreter) Ladies and gentlemen, welcome to the joint press conference of the sixth round of U.S.-China Strategic and Economic Dialogue. I first give the floor to Vice Premier Wang Yang, Special Representative of Chinese President Xi Jinping.

VICE PREMIER WANG: (Via interpreter) Friends from the press, good afternoon. Following two days of intensive and orderly work, the sixth round of China-U.S. Strategic and Economic Dialogue has achieved a full success. During the economic dialogue, the two sides have carried out a candid and in-depth exchange of views on the three major topics: macroeconomic policy and a structural reform, deepening trade and investment cooperation, financial industry reform and opening up, and across-border oversight cooperation.

The dialogue is a full embodiment of the expectations and requirements made by President Xi Jinping in his speech at the opening ceremony of the S&ED. That is, proceeding from reality, taking a long-term view, engaging in in-depth communication, meeting each other halfways, respecting each other, expanding common ground, showing – resolving differences, equality, mutual benefit, and deepening cooperation.

The two sides have expanded consensus and narrowed differences and reached over 90 important outcomes. The two sides commit to further strengthen macroeconomic policy communication and cooperation. The U.S. side will continue to move towards a growth pattern characterized by higher investment and national savings, cut federal budget deficit, reduce debt-to-GDP ratio, encourage personal saving, and pay closer attention to the impact of the U.S. monetary policy on the international financial system. The U.S. commits to maintain close communication and cooperation with China and to support China in running a successful APEC economic leaders meeting.

The two sides will continue to strengthen cooperation within the G20 framework and advance international financial governance reform. The two sides support periodic review of the voting power structure of the World Bank. The U.S. side commits to complete the domestic approval of the 2010 IMF quota and the governance reform program as soon as possible. The two sides have reached an agreement on the terms of reference for peer review of fossil fuel subsidy, and urge more G20 countries to participate in this initiative. The two sides agree to work to reach an agreement on the core issues and the main articles of the text of the Bilateral Investment Treaty in 2014 and commit to launch negative list negotiation earlier in 2015.

The U.S. side welcomes Chinese enterprises’ investment in the United States and commits to maintain open investment environment for various kinds of Chinese investors. The U.S. commits that the Committee on Foreign Investment in the United States applies the same rules and standards to each transaction that it reviews, and also commits to continue to discuss and explain concepts in the U.S. foreign investment review with the Chinese side.

The two sides have carried out constructive discussions on idea expansions. The two sides agree to continue discussion in the coming weeks in order to create conditions for the resumption of the plurilateral negotiations. And the U.S. side commits to treat China fairly in the Export Control Reform Initiative, encourage and facilitate the export of high-technology products for civilian end use to China. The U.S. side commits to discuss China-related issues in the comprehensive appropriation act for the year fiscal – for the Fiscal Year 2014 with the Chinese side. The U.S. commits to adjust the evaluation and the approval process for LNG export, increase the efficiency of evaluation, and to keep the Chinese side informed about the relevant status of progress.

The two sides agree to further strengthen financial cooperation, including cooperation in the areas of shadow banking, OTC derivatives, cross-border audit oversight and accounting standards. The two sides welcome the conclusion of the intergovernmental agreement on the Foreign Account Tax Compliance Act, and the U.S. side commits to treat Chinese financial institutions as deemed compliant.

These important outcomes have not come by easily, and they have provided a good foundation for the meeting between the two presidents in November and also injected positive energy to the building of a new model of major-country relations between the two countries. I want to stress that understanding and mutual trust are important preconditions for the two major countries of China and the United States to achieve win-win cooperation. Dialogue and communication are important means for the two countries to maintain friendship.

Over the past year, Secretary Jacob Lew and I myself have maintained a close communication over telephone, and the two working teams have engaged in frequent consultation and devoted time and energy for the convening of this round of economic dialogue. The success of this round of Strategic and Economic Dialogue once again proves that the two countries have the capability and the wisdom to properly deal with the differences and disagreements of the two sides, overcome various hardships and difficulties, and ensure the giant ship of China-U.S. relationship will continue to brave winds and waves and sail along the right course.

Finally, I want to thank the journalists for following and covering this round of dialogue. You have undertaken your responsibility and certainly deserve the credit for the healthy growth of China-U.S. relations. (Applause.)

MODERATOR: (Via interpreter) Thank you, Vice Premier Wang. I will now give the floor to Secretary of State John Kerry, Special Representative of President Obama.

SECRETARY KERRY: Well, thank you very much. Good afternoon, everybody. I’m very pleased to join Vice Premier Wang and State Councilor Yang as we celebrate 35 years of diplomatic relations between the United States and China. I want to thank both of you for your partnership and your seriousness of purpose that you brought to the discussions over the past two days. I think it’s been constructive and has advanced the dialogue between our countries.

One of America’s clearest and most compelling interests is to develop a positive and constructive U.S.-China relationship. How we manage and grow this relationship will define not only the future of our two nations in our work together, but also greatly impact the possibilities for peace and prosperity in the Asia Pacific region and around the world. That is why this week’s U.S.-China Strategic and Economic Dialogue was and is so important. The S&ED is more than just a moment to take stock of our relationship. President Obama believes that this is a time to build on our progress and set new goals on nearly every major issue that matters to our two countries.

So let me be clear: China’s success is profoundly in the interest of the United States. We seek a partnership that benefits the citizens of both of our countries, our neighbors and the world. We seek a relationship defined not by strategic rivalry, but by practical cooperation on common challenges and constructive management of differences where our interests diverge.

China has an extremely role to play in tackling a host of global issues, and we look to China for partnership in that endeavor. From North Korea to cybersecurity to climate change to wildlife trafficking and many other issues, I’m pleased to report that we continued the important work that we have set out on of outlining specific actions for the future of this crucial relationship.

During our joint session on climate change, I talked with our Chinese counterparts about how we can work together in order to address the threat of climate change and specifically, to work towards the requirements under the international negotiating structure of the United Nations for next year’s negotiations in Paris. We are all required to set targets at the beginning of next year, and it is our hope that this work between China and the United States can help to set a mark, a standard, and an example for the rest of the world.

As the world’s two biggest energy consumers and carbon emitters, China and America together have a special role to play in reducing emissions and in developing a clean energy future. The good news is that we are already making progress. We are working together to phase down the production and the consumption of hydrofluorocarbons, which is a potent greenhouse gas. During my last visit to Beijing, I was privileged to announce implementation plans for each of the five initiatives under the Climate Change Working Group, and we built on that progress in the last two days in concrete ways – announcing programs across all five initiatives. We agreed to adopt stronger fuel efficiency standards for heavy- and light-duty vehicles and greenhouse gas emission standards that will have enormous impact in reducing emissions and improving air quality. We launched four carbon capture, utilization and storage demonstration projects, and four smart-grid demonstration projects, all of which will help prove that there is a clean energy future that is actually within reach. We also took the important step of launching a new initiative on climate change and forests.

Taken together, these actions, we hope, will send a clear message: The world’s two largest greenhouse gas emitters committed to advancing low-carbon economic growth and significantly reducing our countries’ greenhouse gas emissions. This effort has to be mutual and it have to – has to be accompanied by commitments which are defined by the actions that we will actually take. It’s not about one country making a demand of the other. It’s the science itself demanding action from all of us, and in that regard we stepped up together in the last two days.

Close U.S.-China cooperation is also essential for meeting common regional challenges, from Iran and its nuclear program to North Korea, to Ukraine, Iraq and Syria. The United States and China agree on the importance and urgency of achieving a denuclearized, stable, and prosperous Korean Peninsula, and we discussed specific ways in which we think we can advance that goal. China shares the same strategic goal, and we discussed the importance of enforcing UN Security Council resolutions that impose sanctions on North Korea’s weapons of mass destruction and ballistic missile programs.

China has strengthened its sanctions enforcement, but we both understand that there is more that we can do in order to bring North Korea into compliance with its obligations to denuclearize. And the United States recognizes its role, and we will undertake our part and discussed ways in which we can do that, and China also has a unique role in this regard and has understood that obligation.

We also continued our conversations on cybersecurity and cybertheft. The loss of intellectual property through cyber has a chilling effect on innovation and investment. Incidents of cybertheft have harmed our businesses and threatened our nations’ competitiveness, and we had a frank exchange on cyber issues at our Strategic Security Dialogue, and we both agree it is important to continue discussions in this area.

These meetings are critically important in defining our ambitious agenda. Our two nations will be measured not by what we pursue alone – by what we can achieve together. Ultimately what matters is our ability to take meaningful action, joint action to meet the threats and the challenges that confront us. And our obligation and our commitment is clear: It is to work to create the U.S.-China partnership that the world needs and our people expect of us.

Vice Premier Wang and State Councilor Yang, thank you again for your enormous generosity, for the discipline and organization of the meetings of these last two days, for the productivity which you helped to produce, and for the partnership, most importantly, in building a new model of relations between our two powerful, great countries. And we look forward to continuing to fill out the promises of this dialogue. Thank you. (Applause.)

MODERATOR: (Via interpreter) Thank you, Secretary Kerry. Now I give the floor to Secretary of the Treasury Jacob Lew, Special Representative of President Obama.

SECRETARY LEW: I’d like to first extend my thanks to our gracious hosts, Vice Premier Wang Yang and State Councilor Yang Jiechi and their colleagues, as well as to all of my colleagues in the U.S. delegation.

Over the past two days, we’ve engaged in frank, informative, and useful dialogue, reflecting our two countries’ commitment to strengthen our economic relationship and enhance our cooperation on global economic issues. The role of the Strategic and Economic Dialogue is to make concrete progress on issues that matter to the people of both of our nations. Since 2009 when we initiated the first S&ED, we’ve made significant progress on a wide range of issues and we continue to tackle new challenges in these important discussions.

In China, the economy is undergoing a critical transition, where substantial and fundamental shifts in policy will be required to sustain growth in the future. We welcome the market-oriented reform commitments you made in November. Today’s S&ED commitments will further China’s implementation of its reform agenda and will create new opportunities for both of our nations.

Consistent with your reform agenda, China committed to reducing intervention as conditions permit, and China is making preparations to adopt greater transparency, including on foreign exchange, which will accelerate the move to a more market-based exchange rate. These commitments will assist China in its reforms and will help level the playing field. They also reflect the increasingly important role China plays in the global economy.

We’ve made progress on fostering greater competition over the past two days. For example, China has pledged to significantly increase the dividends its state-owned enterprises pay to the government, which will be used to strengthen China’s social safety net. While there’s still work to do, this Strategic and Economic Dialogue made concrete progress that will create new opportunities for U.S. workers and companies in an expanding China market.

We welcome the important steps that China’s leaders have taken and we look forward to continuing to work together as the U.S.-China relationship continues to grow and strengthen. I want to personally thank Vice Premier Wang for his valuable leadership in guiding these discussions. He has demonstrated a commitment to building a relationship of mutual trust and shared prosperity. Thank you very much. (Applause.)

MODERATOR: (Via interpreter) Thank you, Secretary Lew. Now I give the floor to State Councilor Yang Jiechi, Special Representative of Chinese President Xi Jinping.

STATE COUNCILOR YANG: Dear friends from the press, ladies and gentlemen, good afternoon. The sixth round of the China-U.S. Strategic and Economic Dialogue has completed. Over the past two days, the Chinese and the U.S. side, focusing on the important agreement reached between our two presidents, had sincere and in-depth exchange of views on promoting a new model of China-U.S. relations. The meetings have reached extensive consensus and achieved important and positive outcomes.

The success of the dialogue could not have been achieved without support and guidance of the two presidents. President Xi attended the opening ceremony of the joint S&ED and the CPE sessions and delivered an important speech. President Obama sent a written message to the dialogue. This afternoon, President Xi and Premier Li will, respectively, meet with the two U.S. special representatives. The personal involvement, direct input and guidance of the two leaders have injected a strong impetus to the work of the two teams.

During the strategic dialogue, Secretary Kerry and I, focusing on the theme of advancing a new model of major-country relationship, had straightforward, in-depth and constructive dialogues on bilateral relations and major international, regional and global issues of shared interest. We both spoke positively of the achievements made in China-U.S. relations over the past 35 years since the establishment of diplomatic ties. We agreed to continue to follow the important agreement of the two presidents, strengthen practical cooperation, constructively manage our differences, and advance the development of a new model of major-country relations.

We both commit to strengthening exchanges between us at higher levels and other levels. The two presidents will maintain regular dialogue through visits, meetings, telephone conversations, and exchange of correspondence. The two sides also agreed to strengthen cooperation on a wide range of areas, including counterterrorism, law enforcement, anticorruption, customs, fishery, maritime affairs, transportation, consular affairs, protection of persons with disabilities, energy and climate change, nuclear security, environment protection, science, technology, agriculture, health, and those at sub-national levels.

Within the strategic dialogue framework, the two sides also held dialogues on strategic security, economic development and reform, climate change, as well as breakout sessions on UN peacekeeping operations, Sudan and the South Sudan, and the fight against wildlife trafficking. The two sides also signed EcoPartnership agreements. The two sides agreed to seriously implement the agreement reached between their leaders and military leaders on developing mil-to-mil relations, continue to deepen exchange and cooperation between their militaries, and advance the development of military relations.

The two sides will continue to conduct joint exercise on counterpiracy, maritime rescue, and humanitarian relief and disaster reduction. The two sides are committed to set up at an early date a notification mechanism for major military activities and have agreed to further strengthen their consultation on the rules of behavior on military and maritime activities in international waters.

The competent authorities held a Climate Change Working Group meeting and have reaffirmed their commitment to cooperating on reducing hydrofluorocarbons. They have decided that in addition to the five areas – namely heavy-duty and other vehicles; smart grids; carbon capture, utilization and storage; collecting and managing greenhouse gas data; and energy efficiency – to add industrial boilers and forests as new areas of cooperation into the framework of the working group.

The two sides – Chinese side reaffirmed that both should respect each other’s sovereignty and territorial integrity, respect the choice of development paths, and properly handle their differences with constructive manner. The two sides also decided to jointly uphold peace, stability and prosperity in the Asia Pacific region. They both believe that a constructive China-U.S. relationship is crucial to their Asia Pacific policies. The two sides pledge to work towards a more stable, peaceful and prosperous Asia Pacific region and have decided to strengthen dialogue and coordination on Asia Pacific affairs. The two sides also discussed the recent developments in the Asia Pacific region and decided to strengthen coordination and consultation within multilateral forums, including the APEC, East Asia Summit, and ASEAN Regional Forum. The two sides positively comment on the fifth round of China-U.S. Asia Pacific consultations and have decided to hold the next round of consultation later this year in the United States.

The Chinese side reaffirmed its principal position on the issue of East China Sea and South China Sea, reaffirmed that China is committed to upholding its territorial sovereignty and maritime rights, and at the same time commit to handling and resolving relevant issues through dialogues and consultations between the parties directly concerned. The Chinese side urged the U.S. side to adopt an objective, just position and honor its commitment of not choosing sides and play a constructive role in maintaining peace and stability in this region.

The two sides discussed a number of international regional issues, and both believe that the two countries have important responsibilities for upholding peace and stability in the world, and they will continue with their close consultations and coordination on the Korean Peninsula nuclear issue, the Iranian nuclear issue, Afghanistan and other issues.

On the Korean Peninsula nuclear issue, the two sides reaffirmed the importance of achieving the denuclearization of the peninsula with peaceful means and maintaining peace and stability on the peninsula. The Chinese side pointed out that given the current circumstances, all sides should exercise calm and restraint, be discreet in words and actions, and do more things to relax the situation. And the two sides agreed to continue their close consultation on the relevant matters.

On the issue of cybersecurity, this is a common threat and challenge facing all countries. China always maintains that we should strengthen cooperation on the basis of mutual respect and trust so as to work together towards building a peaceful, secure, open and cooperative cyber environment. The Chinese side believes that cyberspace should not become a tool for damaging the interests of other countries. The Chinese side hopes that the U.S. side would create conditions for the two sides to have dialogue and cooperation on the cyber issue.

Ladies and gentlemen, this round of dialogue has helped the two sides to enhance their understanding of each other’s strategic intention in policy, deepen their mutual interests, promote cooperation in all areas, increase friendship, and effectively manage their differences. And once again, I wish to thank Secretary Kerry, Secretary Lew, and the teams and their leadership for coming to China to attend this very important Strategic and Economic Dialogue. And I also thank both teams for their hard work for this dialogue, and I look forward to meeting all of you next year in Washington. Thank you. (Applause.)

MODERATOR: (Via interpreter) Thank you, State Councilor Yang Jiechi. This is the end of the joint press conference. I want to thank all the four special representatives and thank you all for coming.