U.S. Opens China Talks With Cyber Complaints, Vow To Boost Trust

U.S. Vice President Joe Biden (C) shakes hands with Chinese State Councilor Yang Jiechi as Chinese Vice Premier Wang Yang (R) look on during the U.S.-China Strategic and Economic Dialogue (S&ED) Joint Opening Session at the State Department in Washington July 10, 2013. REUTERS/Yuri Gripas

U.S. Vice President Joe Biden (C) shakes hands with Chinese State Councilor Yang Jiechi as Chinese Vice Premier Wang Yang (R) look on during the U.S.-China Strategic and Economic Dialogue (S&ED) Joint Opening Session at the State Department in Washington July 10, 2013. REUTERS/Yuri Gripas

WASHINGTON - U.S. officials appealed to China's self-interest on Wednesday with calls for deeper economic reforms and a halt to cyber espionage - changes they said would benefit both nations.

Vice President Joe Biden launched the annual U.S.-China Strategic and Economic Dialogue by stressing the shared stakes.

"The next steps that China needs to take for its own economy happen to be in the interests of the United States as well," he said as the two-day talks opened in Washington.

"Your own plans call for the kinds of changes that have to take place, that are difficult, like here, but if they do, they will benefit us both, including free exchange rate, shifting to a consumption-led economy, enforcing intellectual property rights and renewing innovation," said Biden.

But Biden did not mince words when he raised the hot-button issue of theft of intellectual property through hacking of computer networks, a conversation complicated by the fugitive spy agency contractor Edward Snowden's revelations of U.S. electronic surveillance around the world.

"Outright cyber-enabling theft that U.S. companies are experiencing now must be viewed as out of bounds and needs to stop," said Biden. U.S. officials say all countries spy on each other, but China is unique in its theft of foreign technology.

Secretary of State John Kerry and Treasury Secretary Jack Lew are hosting a Chinese delegation led by State Councilor Yang Jiechi and Vice Premier Wang Yang for a fifth round of annual talks that cover both economics and wider geopolitical issues.

The talks were launched in 2008 with aim of managing an increasingly complex U.S.-China relationship and avoiding competition between the world's two largest economies from turning into destabilizing conflict.

Wang's remarks to open the forum avoided specific issues and highlighted China's desire - voiced by Chinese President Xi Jinping last month in an informal summit with President Barack Obama - to build a "new type of great power relationship."

"Our job in this round ... is to turn the important agreements between the two presidents into tangible outcomes, and add substance to this new model of major country relationship," he said.

"We need to raise our strategic mutual trust to new heights," added Wang.

Lew echoed Biden in welcoming reform plans circulating in China under the new administration of Xi, who took office in March.

However, while he noted that the two economies were highly connected, Lew also aired a list of American complaints about Chinese policies that a watchful U.S. Congress has pressed the Obama administration to tackle.

The United States, Lew said, seeks "an economic relationship where our firms and workers operate on a level playing field and where the rights of those who participate in the global economy - including innovators and the holders of intellectual property - are preserved and protected from government-sponsored cyber intrusion."

China denies being behind the hacking and insists it is a major victim of cyber attacks, including from the United States - an argument that Beijing sees as strengthened by Snowden's revelations. The two countries held cyber talks on Monday.

U.S. businesses also complain about policies that require foreigners to transfer technology to China in order to sell into the market, barriers to farm goods and financial and regulatory favoritism to China's state-owned companies.

Wang said China favored dialogue over conflict with the United States and had learned a lot from listening to other views as it modernized its economy over the past three decades.

But there were limits to China's tolerance of criticism, he said.

"Like the United States, we will never accept views, however presented, that undermine our basic system or national interests," Wang told the gathering of U.S. and Chinese officials and media.

China is expected to air concerns of its own about U.S. policy, including Beijing's demand that Washington ease Cold War-era controls on high technology exports and clarify the approval process for Chinese acquisitions of American companies.

Biden also said the United States was eager to intensify its cooperation with China to rein in North Korea's nuclear programs, following on statements by Xi and Obama last month that neither would recognize Pyongyang as a nuclear-armed state.

"We have a common interest in defending a wide range of public goods and international rules, that will only grow more compelling as China looks beyond its borders," the vice president said in an appeal to China to uphold global norms.

(Reuters) By Paul Eckert and Anna Yukhananov | Wed Jul 10, 2013 1:54pm EDT

(Additional reporting by Lesley Wroughton and Arshad Mohammed; Editing by Doina Chiacu)

 
 

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