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China-US economic talks kick off | China-US economic talks kick off |
(40 minutes later) | |
Top leaders of the US and China are meeting in Washington to discuss key economic and political differences. | Top leaders of the US and China are meeting in Washington to discuss key economic and political differences. |
President Obama said the relationship between the US and China would shape the 21st century and said the two shared a "mutual interest". | President Obama said the relationship between the US and China would shape the 21st century and said the two shared a "mutual interest". |
China has sent Vice Premier Wang Qishan and State Councillor Dai Bingguo. | China has sent Vice Premier Wang Qishan and State Councillor Dai Bingguo. |
The meeting, called the US-China Strategic and Economic Dialogue, is the first formal negotiation between the US and China since Mr Obama took office. | The meeting, called the US-China Strategic and Economic Dialogue, is the first formal negotiation between the US and China since Mr Obama took office. |
The talks will cover a range of issues, including halting the spread of nuclear weapons in North Korea and Iran, and creating clean and secure energy sources. | |
But the main focus will be on working towards economic recovery. | |
"The current crisis has made it clear that the choices made within our borders reverberate across the global economy - and this is true not just of New York and Seattle, but Shanghai and Shenzhen as well," President Obama said at the start of the talks. | |
"That is why we must remain committed to strong bilateral and multilateral coordination." | |
Manufacturing competition | |
At the meeting, the US will push China to rely less on exports and to focus on encouraging its domestic market. | |
KEY ISSUES Values of dollar and yuanThe US will press China to rely less on exports and more on domestic consumptionChina will push for the US to make a priority of curbing inflationBoth sides will seek reassurances over accusations of trade protectionismNorth Korea and Iran's nuclear programmesClimate change and clean energy | |
US manufacturers complain they cannot compete fairly with their Chinese competitors. | US manufacturers complain they cannot compete fairly with their Chinese competitors. |
Some accuse Beijing of deliberately devaluing its currency to make its exports seem cheaper. | Some accuse Beijing of deliberately devaluing its currency to make its exports seem cheaper. |
But China is unlikely to concede any ground on this point, says the BBC's Chris Hogg in Shanghai. | |
GDP growth might be picking up but the country's exporters are still struggling, he says. | |
'No illusion' | |
China, meanwhile, is worried about the value of the US dollar. It holds huge amounts of US debt - more than $800bn (£486bn) of US Treasury securities alone. | |
It fears President Obama's stimulus spending will stoke inflation in the United States, eroding the value of the dollar and making the US debt China holds worth a lot less. | |
At these talks the US Treasury Secretary Timothy Geithner will be seeking to soothe those fears. | |
He has already tried to reassure the Chinese their assets will be protected. But China is not convinced. | |
China and the US are well aware they need each other. Their economies are bound together tightly. | |
That does not mean they always agree when it comes to trade for example - far from it - but it does mean they accept the need to sort out problems in forums like this. | That does not mean they always agree when it comes to trade for example - far from it - but it does mean they accept the need to sort out problems in forums like this. |
"I have no illusion that the US and China will agree on every issue," President Obama said. | |
"But that only makes dialogue even more important." | |