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US seeking additional avenues for China investment

By Xin Zhiming (China Daily)
Updated: 2009-07-27 07:03

WASHINGTON: In the lead-up to the first China-US Strategic and Economic Dialogue (SAED), scheduled for today and tomorrow, the administration of US President Barack Obama has said it will press Beijing to transform its domestic economic structure and open its doors wider to foreign investment.

The push is part of the US' reaction to the global economic crisis and comes as policy-makers and advisers search for solutions to the crisis - from both inside and outside the country.

In addition to pinning hopes on a nearly $800 billion stimulus package that will put the US into the red for many years to come, top government officials and researchers have been putting pressure on other countries, primarily China, to make changes that will foster a recovery in the US, despite criticism that a fundamental crack in the loose US financial system is what led to the crisis in the first place.

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"China has made some progress in transforming its economic growth model," a senior administration official said on Thursday. The official was speaking on condition of anonymity.

The Chinese effort, he said, was "not intensive enough", despite the fact that even before the crisis hit hard last year, China had set out to restructure its economy by titling toward a consumption-driven and environment-friendly mode of development.

Still, the official conceded that "from what it has done in the past few months, China has shown willingness in implementing policies that bring about (economic structural) adjustment".

US officials have also urged China to open wider to foreign direct investment while defending the US government's barring of what it sees as "dubious" investments in the US by Chinese enterprises - citing "national security".

Economic balance and trade will form only a part of the SAED dialogue. It will include a wide range of other topics, including bilateral relations, regional security issues and climate change.

US officials said issues related to Iran, the Democratic People's Republic of Korea, Afghanistan and Pakistan will also be discussed when officials from the two nations meet here in Washington.

China, for its part, is expected to demand that the US stabilizes the value of the dollar so China's vast dollar assets - now $801.5 billion - would remain relatively safe, according to a Ministry of Finance official who spoke during an earlier press briefing in Beijing.

Given the tight schedule and weight of the topics, experts do not think substantial results are likely from the high-profile dialogue.

"I don't think there is going to emerge out of this discussion any major announcement of changes in policy," said Steven Dunaway, adjunct senior fellow for international economics at the Washington-based Council on Foreign Relations.

"If it's successful, it will be successful by opening up lines of communication and technical discussions, which hopefully will ... move things in the right direction," Dunaway said last week.