The fifth Strategic Economic Dialogue (SED) between China and the United States should not waste time on issues like the RMB exchange rate and market access, but should cooperate on innovative measures to deal with the global crisis, said Shi Yinhong, director of the Center for American Studies, Renmin University of China, in an interview with Hong Kong newspaper Ta Kung Pao on Thursday.
He said the US government should realize that China will increasingly say "No" in diplomatic disputes that affect its core interests.
"China responded to the US arms sale to Taiwan with unexpected firmness; and China also responded strongly to French President Nicolas Sarkozy's decision to meet the Dalai Lama," Shi said, adding these decisions are symbolic of an underlying change that the international community should take note of.
He said that China remains willing to cooperate with the international community and carry out patient diplomacy, but on issues that affect the core interests and dignity of the country, China will be much more straightforward than in the past, and would be prepared to deliver a firm no.
He said the important thing in the fifth SED isn't to reach an agreement, but to seriously discuss the economic situation of the world, to frankly talk about domestic difficulties and corresponding measures taken. The two sides should not rehearse the old disputes, but should put forward innovative ideas for cooperative measures to deal with the changed world situation.
If the US expects China's help, it shouldn't make trouble for China's economy, since that will only backfire on itself. China, for its part, should keep in mind that the US is experiencing an economic recession. Generally speaking, trade protectionism is attractive to politicians in periods of recession, and by comparison with Republicans, Democrats are more inclined to protectionism. So, if the financial crisis does not ease, China-US trade disputes will probably become more serious after Barack Obama is inaugurated in 2009, Shi said.
"Sino-US cooperation and the US market are important to China, but under the present world economic situation, China's exports are shrinking and the country is facing challenges and pressure on the home front. If the US, influenced by the protectionist mood, exerts pressure on China by raising old issues like the RMB exchange rate, it is to be expected that it will make less concessions than ever before."
Shi said that as exports have been badly affected, China needs to ease the pressure by adjusting the RMB exchange rate, but it's a measure to be adopted at an appropriate time. "Certainly, faced with US trade protectionism and the huge Sino-US trade deficit, China won't take any excessive policy steps regarding the RMB. But if the US requests an increase in the value of the RMB, the Chinese government will undoubtedly say no."
(China.org.cn by Zhou Jing, December 5, 2008)
