Today, the United States imposed sanctions on Tidewater Middle East Company, an operator of Iranian ports owned by the Islamic Revolutionary Guard Corps (IRGC) that has links to Iranian proliferation activities. We also imposed sanctions against Iran Air, which was designated for providing material support and services to the IRGC and Iran’s Ministry of Defense and Armed Forces Logistics (MODAFL), and also has facilitated proliferation-related activities. Today’s sanctions also exposed an Iranian individual and entity for their ties to a company that provided support and weapons to Hizballah on behalf of the IRGC.
The IRGC’s illicit activities and its increasing displacement of the legitimate Iranian private sector in major strategic industries, including in the commercial and energy sectors, are deeply troubling. The IRGC also serves as the domestic “enforcer” for the Iranian regime, continues to play an important proliferation role by orchestrating the import and export of prohibited items to and from Iran, is involved in support of terrorism throughout the region, and is responsible for serious human rights abuses against peaceful Iranian protestors and other opposition participants.
Preventing Iran from developing nuclear weapons is a top U.S. Government priority and we remain deeply concerned about Iran’s nuclear intentions. The United States is committed to a dual-track policy of applying pressure in pursuit of constructive engagement, and a negotiated solution.
On June 9, 2011, the P5+1 countries (China, France, Germany, the Russian Federation, the United Kingdom, and the United States) reaffirmed their concerns about Iran’s nuclear program and their commitment to a diplomatic solution in their statement to the International Atomic Energy Agency’s Board of Governors. Many other governments have also expressed serious concerns about the behavior and policies of the Iranian leadership and have urged Iran to change course and seek a path of negotiation. Yet, in the face of this unified international message, Iran has continued to violate its international obligations and disregard our attempts to start meaningful negotiations over its nuclear program.
For this reason, the United States is convinced that the international community must continue to increase and broaden the scope of pressures on Iran. We welcome steps such as the European Union’s designation of more than 100 entities and individuals last month and the improved implementation of sanctions against Iran that we are seeing around the world.
This month, the United States amplified our sanctions against Iran’s leadership through a comprehensive initiative aimed at Iran’s dangerous behavior–its continued proliferation activities, its human rights abuses, and its destabilizing activities in the region.
On June 9, we sanctioned the Iranian security forces for human rights abuses. Earlier this week, we continued our efforts against the Islamic Republic of Iran Shipping Lines (IRISL), which the UN Security Council 1737 Sanctions Committee noted has been involved in several violations of UN Security Council resolutions on Iran.
The steps we have taken this week seek to limit Iran’s ability to use the global financial system to pursue illicit activities. We have made important progress in isolating Iran, but we cannot waver. Our efforts must be unrelenting to sharpen the choice for Iran’s leaders to abandon their dangerous course.
The United States and our partners remain fully committed to a diplomatic solution with Iran. However, until Iran is prepared to engage seriously with us on such a solution, we will continue to increase pressure against Iranian entities of concern.
MR. TONER: First question goes to Matt Pennington of the Associated Press.
QUESTION: Secretary Clinton, do you think the events of the recent months in the Middle East should hold a lesson for China that eventually popular will, will challenge and bring down authoritarian governments? And did you discuss – in either your public or private discussions, did you discuss these issues with your Chinese counterparts, and how did they respond?
SECRETARY CLINTON: First, let me say that we did discuss the events occurring in the Middle East and North Africa. We exchanged impressions and views about how individual nations as well as the region is moving in the pressures for transition, for changes, for political and economic reform. Every nation and every region is different. I think it is very difficult to draw any overall conclusions. In my discussions with State Councilor Dai, I pointed out that, starting in 2002, there were a series of reports done by Arab experts about the development of that region and how it had not kept up with the rest of the world, particularly Asia.
So there was a lot of exchange of ideas, but I don’t think that you can draw any specific conclusions other than to say that the United States supports the aspirations that the people in the Middle East and North Africa have expressed for more freedom, for more opportunity, for a better future for themselves and their families, and we will continue to support the people of the region as they try to realize those aspirations during this transition period.
MR. TONER: Our second question goes to Wei Ran of Xinhua News.
QUESTION: Secretary Clinton, I appreciate for giving me this opportunity. For the Chinese side, its government has always stated that it is sticking to a policy and it will continue to stick to a policy of a peaceful development. And as we all know, that the real purpose of this dialogue, or the purpose of any dialogue, is to enhance mutual understanding and mutual trust. So when this round of dialogue concluded today, could we say that the U.S. side now have a better understanding and better recognition of China’s strategic intent? Thank you.
SECRETARY CLINTON: Thank you for the question. And I agree with you that the purpose of any dialogue is to enhance mutual understanding and mutual trust in the other. I think we’ve made quite a bit of progress in the last three dialogues. This is a work in progress. I think that for both of our nations, with such different histories, cultures, experiences, development models, political systems, it is important that we continue intensive consultations.
And as both of us have said, we do not expect to find agreement on every issue. We know that we approach some of these sensitive matters from a very different perspective than our Chinese counterparts. But I do think it is fair to say – and it’s something that Secretary Geithner said as well in his opening statement – I do think we have a deeper understanding of the viewpoint of the other. I think we have had such an open dialogue on every issue, that we have built trust because we’re not keeping any issue under the table or off the agenda. We are talking about the hard issues, and we’re developing these habits of cooperation across our government.
In addition, this is not just a task for governments. We are placing great emphasis on our people-to-people, our business-to-business contacts and experiences. I was delighted at the lunch that Secretary Geithner and I hosted for a group of American and Chinese business leaders, that they had some of the same comments, even some of the same complaints about their own and other government interference with being able to maximize their business opportunities. So I do think we are reaching a much better understanding, and I think that’s one of the principal purposes of the dialogues.
MR. TONER: Our third question goes to Howard Schneider of Washington Post. Howard.
QUESTION: Thanks. Secretary Geithner, just – I’m curious. A lot of this stuff on the economic issue seems to be kind of pressing industry by industry, market by market, around the indigenous innovation issue. And I’m wondering, are you challenging with them the sort of core logic of indigenous innovation? And if so, what’s their response on that? Are you satisfied or do you just sort of battle it out policy by policy?
SECRETARY GEITHNER: We generally try not to do it sector by sector or business by citizens. I think our approach has been to try to look at the basic design of policy across the Chinese economy. And where we see the potential risk that policy may have the effect of putting foreign innovators, foreign companies, U.S. companies, at a disadvantage, then we encourage China to change those policies and to try to pursue their objective of encouraging the development of Chinese technologies through other means. And I think our general approach on these things is to try to come at the policy at the highest level, and we think that has the most effect.
I think if you look at China and the United States, we have still very, very different economic systems; very, very different traditions of approaching economic policy. And China does still have a largely state-dominated economy, and the government plays a much more active role in the direction of the economy. The financial system, of course, is still fundamentally directed by the state. And China is at the early stages, really, even with all the reforms of the last 30 years, of making that transition to an economy where the best technology wins, where the market and competition is the driving force in allocating capital.
But they’re changing, and I think they recognize that if China’s going to be any stronger in the future, they have to increase the role for the markets, strengthen the incentives for innovation in China, and allow for a more neutral competition. And I think that’s a fundamentally healthy recognition and, as I said in my opening remarks, I think you’re seeing China move in that direction. We think the direction of policy is very promising, and we’ve very confident we’re going to see substantial ongoing improvement in the opportunities that American companies have in the Chinese market, both American companies operating in China and companies that are creating and building things in the United States.
MR. TONER: And our last question is to Li Guanyun of The 21st Century Business Herald.
QUESTION: I have a question for Secretary Geithner. Minister Chen emphasized that the United States should trade Chinese investment into United States much equally. And this afternoon, you have had a dinner with some Chinese entrepreneurs, and I know that some of them is considering to investment – investing in United States. So I mean, as this round of dialogue which United States try to trade more equally to the Chinese investment, and how do you communicate with Chinese investors if there is a (inaudible)?
SECRETARY GEITHNER: Very good question, and it was an important part of our conversations these last two days, not just at lunch. So let me just make it clear. We welcome Chinese investment in the United States, and I am very confident that if you think – if you look over the next several years, you’re going to see Chinese investment in the United States continue to expand very, very rapidly. That will be good for the United States, good for China. Of course, that’s driven by the desire of Chinese companies to have more access to U.S. technology and to try to expand their opportunities in this market, and again, we welcome that. We have an open, nondiscriminatory regime with respect to investment from outside the United States. We treat Chinese companies, Chinese investment like we treat investment from any other country, and we’re going to continue to make sure we preserve that open investment regime, because it’s very important to the basic strengths and dynamism of the United States.
Now, to be fair, we also discussed China’s investment regime, the policies China has in place to screen and limit foreign investment in the United States. And of course, although we recognize China’s interest in expanding opportunities in the U.S. market, it’s worth recognizing that China’s own investment regime is a much more restrictive regime with a much more careful management and set of limitations on the ability of foreign firms to invest and purchase stakes in Chinese companies, but that’s changing, too. And again, I think it’s in China’s interest that change over time, and I expect you’re going to see us continue to look for concrete areas where we can reassure investors in both countries that they’re going to face more opportunities on the investment side both in China and the United States.
MR. TONER: Thank you. That is, unfortunately, all the time we have this afternoon, but we appreciate your participation. Thank you.
SECRETARY CLINTON: Good afternoon. I want to begin by thanking our Chinese colleagues, led by Vice Premier Wang and State Councilor Dai and the entire Chinese delegation for a productive and comprehensive dialogue between us. And I also, along with Secretary Geithner, want to thank everyone on the American side, not just those from the State Department or Treasury but indeed from across our government. The unprecedented level of involvement and the extraordinary work that has taken place since our last S&ED in Beijing was truly impressive.
The Strategic and Economic Dialogue continues to grow broader and deeper. It reflects the complexity and the importance of our bilateral relationship. And we have covered a lot of ground together, and I’m happy to report we have made a lot of progress. The list of agreements and understandings reached is quite long. We have seen concrete progress on a wide range of shared challenges, from the energy and environment to international trade and security. For example, there is now a new partnership that will bring U.S. and Chinese companies and universities together. Those which are developing innovative environmental technologies will now be working bi-nationally and with local governments and NGOs to promote sustainable development projects such as next generation batteries for electric cars, and new clean air and water initiatives. Already, Tulane University in New Orleans and East China Normal University are collaborating to improve the conservation of wetlands, and we have seen many other examples.
We are also laying the groundwork for potentially significant future collaboration on development, from working together to innovate and distribute clean cookstoves and fuels to strengthening public health systems in developing countries. And our people-to-people programs continue to expand, most notably our “100,000 Strong” Student Exchange Initiative, which has already raised the stated goal of dollars to go along with the very generous Chinese Government support for 20,000 American students because all of us are committed to increase more people-to-people interactions and opportunities. Now, I am well aware that these specific and very substantive partnerships may not produce major headlines, but I think they do reflect our shared commitment to translate the high-level sentiments and rhetoric of these diplomatic encounters to real world benefits for our citizens, our countries, and the wider world.
Just as important, although perhaps even harder to quantify, are the habits of cooperation and mutual respect that we’ve formed through these discussions. We believe that to keep our relationship on a positive path, as foreseen by Presidents Obama and Hu, the United States and China have to be honest about our differences and address them firmly and forthrightly. At the same time, we are working together to expand the areas where we cooperate and narrow the areas where we diverge. And we are building up a lot more understanding and trust. So we discussed everything, and whether it was something that was sensitive to us or sensitive to them, all the difficult issues, including human rights. And we both have made our concerns very clear to the other. We had candid discussions on some of our most persistent challenges, from addressing North Korea and Iran to rebalancing the global economy.
We agreed on the importance of cooperating in Afghanistan to advance common goals of political stability and economic renewal. We established a new U.S.-China consultation on the Asia-Pacific region, where we share a wide range of common interests and challenges. And for the first time in these dialogues, senior military and defense leaders from both sides sat down face to face in an effort to further our understanding, to develop trust, and avoid misunderstandings that can lead to dangerous miscalculations. This new strategic security dialogue is a very important step forward, and we think it will add immeasurably to our bilateral relationship.
As we have discussed these issues and as we have committed to keeping the relationship moving forward, we have some milestones ahead of us. For the first time, President Obama plans to participate in this year’s East Asia Summit. And Vice President Biden will travel to China this summer, continuing our discussions on the full range of shared regional and global challenges. And he hopes to return the hospitality by welcoming Vice President Xi Jinping to Washington at a later date. I look forward to seeing our Chinese partners at the ASEAN Regional Forum in Indonesia, and both the President and I and the Secretary are greatly anticipating the United States hosting APEC in Hawaii.
Now, those are just a few of the highlights. But day to day, at every level of our governments, we are working hard to build that positive, cooperative, comprehensive relationship that our two presidents have asked for. This is the long, hard, unglamorous work of diplomacy. At our plenary sessions that State Councilor Dai and I chaired yesterday, there was a dizzying array of issues that we are working on together, and I felt very satisfied because that was not the case two years ago. And I anticipate that we are going to see further progress, because we want to realize the full promise of our partnership, and we very fervently hope to leave a more peaceful and prosperous world for our children and our children’s children.
So let me again thank our Chinese friends for making this long journey and for working as we move forward on our journey together into the future.
Now, I am pleased to turn to my colleague and partner, Secretary Geithner.
SECRETARY GEITHNER: Thank you, Secretary Clinton. Let me outline the highlights of our discussions on the economic side.
We had a very comprehensive discussion about a full range of economic issues between us and facing the global economy. As always, we reviewed the major risk and challenges to our – to growth domestically in China and the United States, and we talked about the major risks and challenges on the global economic front. We talked about the investment climate in both countries. We talked about energy policy, financial reform – very comprehensive discussions. And we benefited on the U.S. and on the Chinese side from an exceptionally talented and very senior delegation of financial exports – experts, members of the cabinet, regulators, et cetera. And that’s very important.
Now, our three key objectives on the U.S. side were: first, to encourage the ongoing transformation of the Chinese economy away from its export-dependent growth model of the past to a more balanced growth strategy led by domestic demand; to encourage China to level the competitive playing field between U.S. and Chinese companies, both in China and around the world; and to strengthen our engagement with China on financial reform issues in both countries.
And we have made very, very significant progress in our economic relationship over the past two years. Our exports to China reached $110 billion last year and are growing about 50 percent faster than our exports to the rest of the world. And those exports are all the things Americans create and build – from agriculture, all sectors of manufacturing, services, and advanced technology – and they support hundreds of thousands of jobs across the United States.
Now, overall, we are seeing very promising shifts in the direction of Chinese economic policy. First on the exchange rate, since last June, as you know, the Chinese currency, the renminbi, has appreciated against the dollar by more than 5 percent, and at an annual rate of about 10 percent when you take into account the fact that Chinese inflation is significantly faster than that in the United States.
We hope that China moves to allow the exchange rate to appreciate more rapidly and more broadly against the currencies of all its trading partners. And this adjustment, of course, is critical not just to China’s ongoing efforts to contain inflationary pressures and to manage the risks that capital inflows bring to credit and asset markets, but also to encourage this broad shift to a growth strategy led by domestic demand.
China has outlined in its Five-Year Plan a comprehensive set of reforms, again, to shift its growth strategy away from one relying on exports to domestic demand. China has joined a broad commitment with other countries in the G-20 to put in place mechanisms to reduce the risk that we see once again the emergence of large, external imbalances that could threaten future financial stability and future economic growth.
This process is going to take time, and of course, it’s going to require a sustained effort of reform. But of course, it’s essential to the future health of the global economy and the trajectory of future growth in China. Again, we’re seeing progress here, too. If you just step back from and look, China’s current account surplus as a percent of GDP peaked at about 10 percent before the crisis. It’s now around 5 percent, and of course, we’d like to see that progress sustained.
This brings me to the third area, the third area of focus in our discussions, which is how to create a more level playing field. In our meetings over the last few days, we’ve seen some very important steps towards that goal, and let me just review a few of them. First, China committed to making long-term improvements in its high-level protection of intellectual property rights and enforcement regime to strengthen the inspection of government software and use at all levels of government. And this will help protect U.S. innovators as well as Chinese innovators in all industries, not just in software. And I think that’s very important.
China also confirmed that it will no longer employ government procurement preferences for indigenous innovation products at any level of government. And this is important to make sure, of course, that U.S. technology, U.S. firms, can compete fairly for business opportunities in China.
China has committed to increased transparency, requiring government authorities to publish regulations at least 30 days in advance, so again, that U.S. firms, all foreign firms, have the chance to see those informations – see those regulations in draft and they have the opportunity for input just as their Chinese counterparts do.
China and the United States, recognizing the importance of transparency and fairness in export credit policies, have agreed to undertake discussions on export – on the terms of our respective export credit policies. And this is important, of course, because China, by some measures, is the largest provider of export credit on – in the world.
And finally, we’ve been discussing with the Chinese authorities the important objective of how to make sure that companies in China that compete with state-owned enterprises are not put at a broader disadvantage.
The final focus of our discussions on the economic side was China’s ongoing financial reforms to create a more open, more flexible, more dynamic, more developed financial system. And these reforms, which are designed to increase the returns to savers, to further develop China’s equity and bond markets, and to expand opportunities for foreign financial institutions in China are very important and very promising, not just, of course, in expanding opportunities for U.S. institutions but also reinforcing this broad shift in strategy by the Chinese Government towards a growth strategy led by domestic demand.
Now, when President Hu visited Washington in January, President Obama described the evolution of our relationship as – quote – “a healthy competition that spurs both countries to innovate and become even more competitive.” And of course, just as China faces significant economic challenges at home, we have our challenges in the United States, too. And we are working very hard not just to repair the damage caused by this financial crisis, but to make sure that as we restore fiscal sustainability, as we return to living within our means as a country, we’re making sure we preserve the capacity to invest in things that are going to be critical to the future strength of the American economy. And I can say, based on the strength of our conversations and the strength of this emerging relationship, that this economic relationship with China is – will continue to grow, continue to deepen, and continue to provide tremendous opportunities for both nations. And you see today concrete, tangible signs of progress on both sides that underscore that commitment of both our presidents.
In conclusion, I just want to end where Secretary Clinton began, which is to thank the delegations on both sides, both the American and Chinese participants in these discussions. They brought a directness and candor and, frankly, greater openness than we’ve seen in the last two years, and I think that is very welcome. And I want to express my personal gratitude to Vice Premier Wang for his leadership in these discussions, and to compliment him for the very substantial changes he’s already been able to bring about. Thank you very much.
VICE PREMIER WANG: (Via interpreter) Dear friends from the press, under the guidance of President Hu Jintao and President Obama and thanks to the joint endeavor of the both sides, the third round of China-U.S. Strategic and Economic Dialogues has been a great success. The essential mission of our economic dialogue is to implement the important agreement reached between the two presidents during President Hu Jintao’s recent state visit to the United States this past January and to implement the building of China-U.S. comprehensive and mutually beneficial economic partnership.
We had in-depth discussions of our overarching strategic and long-term issues in bilateral economic cooperation, and arranged a host of win-win outcomes. Particularly, Secretary Geithner and I signed a China-U.S. comprehensive framework promoting strong, sustainable, and balanced economic growth and economic cooperation. Under the framework, the two countries will carry out an expanded, closer, and a more extensive economic cooperation. We agree that in today’s extremely complex economic environment, our two nations should further step up macroeconomic policy coordination and communication, and contribute to steady and sound economic growth in both countries.
We discussed the implications of European sovereign debt crisis, the nuclear leak disaster triggered by Japan’s earthquake, the turbulence in the Middle East for the global economy, and we highlight the international community should work together to ensure strong and a sustainable world economic recovery, to effectively advance the reform of global economic structure, to gradually build a fair and a reasonable international economic order.
The two sides agree that in a transformation of our respective growth models and economic restructuring, we will use respective strength and expanded cooperation in railway, power grids, and other infrastructure programs, and in clean energy, green economy, and science and technology innovation, and expand bi-national and the corporate exchanges and cooperation.
We highlight our commitment to build a more open trade and investment system. The United States commits to accord China fair treatment in a reform of its export control regime, relax high-tech exports control towards China, and to consult through the JCCT in a cooperative manner to work towards China’s market economy status in an expeditious and a comprehensive manner. And the two sides will strengthen cooperation in bilateral investment treaty negotiation and strengthen cooperation in IPR protection, food safety, and product quality. We will advance Doha round negotiations and reject trade and investment protectionism.
We also had in-depth discussions of financial cooperation and agreed to strengthen information-sharing and cooperation regarding the regulation of systemically important financial institutions, shadow banking, business, credit rating agencies, the reform of remunerations policy and combating illegal financing, and to jointly advance international financial architecture reform. The United States welcomes Chinese financial institutions to invest in America and to recognize China’s enormous progress in capital adequacy ratio, comprehensive consolidation supervision, and the other regulatory aspects. The United States commits to further enforce strong supervision of government-sponsored enterprises and to make sure they have enough capital to fulfill financial obligations.
Knowing oneself and each other is an important prerequisite for cooperation. In the economic dialogue, we increased our mutual understanding, expanded consensus, and arranged outcomes. This will give a strong boost to the growth of the China-U.S. comprehensive partnership based on mutual respect and mutual benefit.
I thank you, everyone, and I would like to thank Secretary Geithner and Secretary Clinton and the U.S. team for all the work you have done for a successful economic dialogue. Thank you.
STATE COUNCILOR DAI: (Via interpreter) Dear friends from the press, it’s a great pleasure to meet with you once again. The China-U.S. Strategic and Economic Dialogues have already completed its third round. For each and every round, we invite friends from the media to come here to draw a successful conclusion, so I’d like to thank you. This round of dialogue was held as President Hu Jintao paid a successful state visit to the U.S. earlier this year. The two sides agreed to build a China-U.S. partnership based on mutual respect and mutual benefit.
I want to tell you the following: First, on the strategic track, Secretary Clinton and I focused on the agreement of our two leaders and exchanged views on how to build a China-U.S cooperative partnership based on mutual respect and mutual benefit. We had in-depth and practical exchange of views.
Our dialogue covered many issues, including China-U.S. bilateral relations, major issues internationally and regionally, and we had a good conversation. We agreed that we must act in accordance with the spirit of the China-U.S. joint statements, work to increase our strategic mutual trust, enhance exchanges at higher levels, have closer dialogue on international and regional issues, and to further increase our people-to-people exchange.
We issued an outcome list of the strategic track which covered energy, environment, science, technology, transport, forestry, and climate change cooperations. I said we had a good conversation, and I did not mean that we agreed on each and every issue. However, after each round of dialogues, we successfully expanded our mutual understanding and increased our mutual trust and enhanced our cooperation, and this has added to our confidence of further developing our bilateral relations in the future.
Secondly, both of us agreed that we must increase our strategic mutual trust and deepen our practical cooperation. The U.S. had reaffirmed that it welcomes a strong, successful, and a prosperous China that plays a greater role in international affairs, and it does not seek to contain China. It respects China’s interests. And both sides reaffirmed their commitment to a peaceful – the Chinese side reaffirmed its commitment to the road of peaceful development, and will not challenge the United States interests.
A China-U.S. strategic security dialogue is a very important outcome of this dialogue. We agreed to hold this dialogue within the framework of the Strategic Dialogue, and held its first round of meeting this morning, and the China-U.S. strategic security dialogue will continue to be held in the future. We also talked about further deepening our bilateral cooperation and fostering new areas of cooperation and make our – the pie of our common interests bigger and more tasteful.
Thirdly, we agreed that we will work together in the Asia-Pacific region so that we can better coordinate with each other and better interact with each other in the Asia-Pacific. We agreed that Asia Pacific is broad enough to accommodate the interests of China and of the United States. We must work together in this region, work together with other countries in this region to uphold peace, stability in the Asia-Pacific and to promote the sustained prosperity of the Asia-Pacific and achieve the common development of all countries in this region so that the Pacific Ocean will become a peaceful one. We agreed that we will set up a consultation mechanism for Asia-Pacific region.
Fourthly, we both agree that we must work globally and respond to international as well as domestic challenges. Recently, there have been new and important changes in the international situation. For China and the United States as two influential countries, it is important that we have more consultation, coordination, and cooperation in order to promote and safeguard peace, stability, and the prosperity of the world. I wish to tell the friends from the media that the Strategic and Economic Dialogue, since its inception, has played a very important role in enhancing our mutual trust, coordinating our position, and promoting our mutually beneficial cooperation. China is ready to work with the U.S. side to further grow and make good use of this S&ED dialogue and mechanism so that it can better serve China-U.S. relations. On how to make use of this mechanism, I think we are open to the good suggestions and proposals from the friends of the media.
To conclude, like Vice Premier Wang Qishan, I would like to thank Secretaries Clinton and Geithner as well as colleagues and staff from China and from the U.S. for your hard work to ensure the success of this round of dialogue. I wish to thank the U.S. side for your thoughtful arrangements and to thank you, friends, from the media for your interest in this dialogue. I’m looking forward to seeing you again in Beijing next year and continue our dialogue. Thank you. (Applause.)
Sidney R. Yates Auditorium
Department of the Interior
SECRETARY CLINTON: Good morning. We are delighted to welcome you here to the Department of the Interior, a department that deals with the beautiful landscape and nature of our country along with the national parks that have been established. It’s a very historic building, which is appropriate for the third round of the Strategic and Economic Dialogue. And it is such an honor to host Vice Premier Wang, State Councilor Dai, and the entire Chinese delegation on behalf of Secretary Geithner and myself. I am very pleased that we are joined by so many officials and experts from throughout both the United States Government and the Government of China, and we are delighted that we will shortly be joined by Vice President Biden, and I know President Obama is looking forward to meeting with the leadership of our two governmental teams later today.
The Strategic and Economic Dialogue is the premier forum in a bilateral relationship that is as important and complex as any in the world. Since we first gathered in Washington back in 2009, the depth and breadth of our discussions and the participation across our two governments have grown significantly.
Through these meetings and the conversations that take place within them, both the informal conversations like the ones we had last night over dinner at the Blair House and the formal meetings, we seek to build a stronger foundation of mutual trust and respect. This is an opportunity for each of us to form habits of cooperation that will help us work together more effectively to meet our shared regional and global challenges and also to weather disagreements when they arise. It is a chance to expand the areas where we cooperate and to narrow the areas where we diverge, while both of us holding firm to our values and interests.
Now more than ever, with two years of Dialogues behind us, success depends on our ability to translate good words into concrete actions on the issues that matter most to our people. So as we begin this third round, we will keep that goal in clear focus.
Our work really begins with our commitment to better understanding one another, to building trust between each other, and to working to avoid misunderstanding and miscalculation. We all know that fears and misperceptions linger on both sides of the Pacific. I will be very open about that. Some in our country see China’s progress as a threat to the United States. Some in China worry that America seeks to constrain China’s growth. We reject both those views. We both have much more to gain from cooperation than from conflict. The fact is that a thriving America is good for China and a thriving China is good for America. But to work together, we need to be able to understand each other’s intentions and interests. And we must demystify long-term plans and aspirations.
That is why, for example, Secretary of Defense Robert Gates and I have spoken often about the importance of developing more sustained and substantive military-to-military engagement that increases transparency and familiarity. So I am very pleased that for the first time, senior military officials from both sides will participate in this Dialogue. They will join civilian counterparts to discuss how we can reduce the dangerous risks of misunderstanding and miscalculation. In particular, I would like to thank Deputy Chief of the PLA General Ma for being with us for these important discussions.
We are also working to build greater understanding and trust between our citizens and to foster stronger ties between our students, our businesses, and our communities, expanding on the consultations that were held here in Washington last month. That includes the 100,000 Strong program. This is a program to boost educational exchanges and to create new links between entrepreneurs and investors. I’m looking forward to lunching with business leaders from both of our countries. We’re also emphasizing programs to connect women leaders and a new initiative to bring together state and provincial officials. And of course, we want to continue our strong people-to-people diplomacy. Building mutual trust and respect will help us to solve shared problems. We both have a great stake in curbing climate change and charting a clean and secure energy future. We both care about promoting responsible and sustainable development around the world, and we both are committed to stopping the dangerous spread of nuclear weapons.
China and the United States face a wide range of common regional and global challenges. How our two countries work together to meet those challenges will help define the trajectory, not only of our relationship going forward, but the future peace, prosperity, and progress of the world. Whether it’s the global financial crisis, or the upheaval in the Middle East, recent history has underscored the link between our economies and global security and stability. And that intersection is at the heart of our dialogue. So we will be discussing the need to work together to rebalance the global economy and assure strong, sustained future growth.
There are some very important international security issues we will be discussing. As permanent members of the United Nations Security Council, the United States and China came together to enact tough sanctions on Iran, and now we are working to implement them. Our two countries share a vital interest in maintaining peace and stability on the Korean Peninsula, and that includes the complete denuclearization of the peninsula. So we continue to urge North Korea to take concrete actions to improve relations with South Korea and to refrain from further provocations, and we want to see North Korea take irreversible steps to fulfill its international obligations toward denuclearization.
Now, like any two great nations – in fact, I would argue like any two people – we have our differences. And like friends, we discuss those differences honestly and forthrightly. We will be continuing the discussion of the recent U.S.-China Human Rights Dialogue just held in Beijing. We have made very clear, publicly and privately, our concern about human rights. We worry about the impact on our domestic politics and on the politics and the stability in China and the region. We see reports of people, including public interest lawyers, writers, artists, and others, who are detained or disappeared. And we know over the long arch of history that societies that work toward respecting human rights are going to be more prosperous, stable, and successful. That has certainly been proven time and time again, but most particularly in the last months.
So this dialogue offers us a forum to have these candid discussions while continuing to focus on where we are going to cooperate effectively. As my friend State Councilor Dai knows, I am fond of finding Chinese sayings and proverbs, and I used one that has, for me, been the real inspiration for our participation back in 2009, that China and the United States are like people in the same boat, and we have to row in the same direction to get anywhere. Well, there’s also wise Chinese expression that says, “When confronted by mountains, one finds a way through. When blocked by a river, one finds a way to bridge to the other side.” Well, we are here to keep building those bridges, and we are not doing this alone. We are part of a web of institutions and relationships across the Asia Pacific and the world.
The United States is practicing what we call forward deployed diplomacy. We’re expanding our presence in people, programs, and high-level engagement. We’ve renewed our bonds with our allies. We broaden our involvement with multilateral institutions. And the first time ever this year, President Obama will participate in the East Asia Summit. So we have a lot of work ahead of us, both bilaterally and regionally and globally, and we have a lot to cover in a short time.
So again, I am delighted to welcome all of you here to express my confidence in this relationship and in the importance of this dialogue. And it is now my great honor to invite Vice Premier Wang to address you.
Vice Premier. (Applause.)
VICE PREMIER WANG: (Via interpreter) Secretary Clinton, Secretary Geithner, dear colleagues, we are gathered here today for the third round of China-U.S. Strategic and Economic Dialogues. On behalf of the Chinese delegation, I would like to express sincere thanks to the U.S. side for the (inaudible) arrangements. President Hu Jintao attaches great importance to the S&EDs. He asked me and State Councilor Dai Bingguo to convey his greetings to President Obama, Vice President Biden, Secretary Clinton, Secretary Geithner, and all those who work for the S&EDs on the U.S. side.
President Hu Jintao highly appreciates the important role of the S&EDs in deepening understanding; enhancing strategic, mutual trust; and strengthening communication and cooperation between our two countries at bilateral, regional, and global levels. He hopes that both the Chinese and U.S. sides will make the most of this round of dialogues to have in-depth exchange of views on ways to further enhance strategic, mutual trust, and deepen practical cooperation. He looks forward to the implementation of the agreement he reached with President Obama and the advancement of the U.S. – of the China-U.S. cooperative partnership based on mutual respect and mutual benefit.
Dear colleagues, last January, President Hu Jintao paid a state visit to the United States. It was a historic visit which achieved great success. With vision and foresight, the two presidents opened a new page in China-U.S. relations. Over the past 32 years since the establishment of diplomatic ties between China and the United States, China-U.S. relations have kept moving forward despite twists and turns. Our two countries differ in history, culture, development stage, resources, endowment, and national circumstances, but we are highly interdependent and mutually complementary economically.
China and the United States are each other’s second largest trading partner. The United States is China’s second largest export market. And China is the fastest growing export market for the United States. Together, China and the United States account for one third of the world’s GDP and one fifth of global trade. China-U.S. relationship has far exceeded the bilateral scope and has acquired growing global significance. We are witnessing profound and complex changes in the world economic landscape, changes that are driven by globalization. At present, we still face many uncertainties while we are striving to tackle global economic recession and sustain economic recovery. Against such a backdrop, economic and social development in China and the United States face both common challenges and opportunities of cooperation.
Now, there are both complementarities and clashes in our respective policies geared to ensure economic recovery. However, we have far more shared interests and cooperation than differences and competition. Both sides must, therefore, make better use of the S&EDs as an overarching framework for the examination of long-term and strategic issues, and take forward steps to advance the sound development of China-U.S. economic relations.
Dear colleagues, the past and the present have proven, and the future will prove, that nothing can hold back the trend of China-U.S. cooperation. We have confidence in that. Our confidence comes from the broad, common interests between our two countries, the shared aspirations of our two peoples, as well as from historical and philosophical reflections. One action is better than 1,000 words. Let us use that opportunity brought by the current round of the S&EDs to earnestly implement the important agreement reached between our two presidents, and deepen our cooperation in economic, trade, investment, financial infrastructure, and other fields in an all-around way. By so doing, we will contribute to the strong, sustainable and balanced growth of not only our two economies, but also the world economy. I wish the third round of the S&EDs great success.
Thank you. Now, I would like to invite Secretary Geithner to address you. (Applause.)
SECRETARY GEITHNER: I want to start by joining Secretary Clinton and my U.S. colleagues in welcoming the Chinese delegation. Vice Premier Wang and Councilor Dai, it’s good to see you again in Washington.
When the Strategic and Economic Dialogue first met in Washington two years ago, President Obama said the United States and China share mutual interests; if we advance those interests through cooperation, our people will benefit and the world will be better off because our ability to partner with each other is a prerequisite for progress on many of the most pressing global challenges.
Now we have worked carefully and deliberately since then to demonstrate that basic truth, and our economies are stronger today because of the commitment of President Obama and President Hu to deepen our economic relationship even as we each confront significant economic challenges at home. I want to compliment Vice Premier Wang for his leadership in this joint effort. He is a tough and forceful defender of China’s interests. He focuses on the practical and the achievable. And he recognizes that China’s economic success depends on a growing world economy and a strong relationship with the United States.
When President Obama and President Hu launched the Strategic and Economic in London of April – in April of 2009, the world economy was in the grip of the worst financial crisis since the Great Depression. Today, thanks in no small part to the actions of the United States and China, we have put out the worst of the financial fires and the world economy is growing again. And because of the success of the cooperative strategy we launched together with the G-20, world trade is now expanding rapidly, companies around the world are investing in hiring, and fears of deflation have receded.
But of course, we still face very significant though very different economic challenges at home. In the United States, even after a year and a half of positive economic growth and more than 2 million private sector jobs created, unemployment is still very high and we still have a lot of work to do here in repairing the damage caused by our crisis. Our challenge in the United States is to strengthen the foundations for future economic growth, and this requires a sustained effort to improve education, to strengthen incentives for innovation and investment, even as we put in place the long-term fiscal reforms that will force us once again to live within our means as a nation.
In China, building on the remarkable reforms of the last 30 years, the challenge is to lay a foundation for a new growth model driven more by domestic demand with a flexible exchange rate that moves in response to market forces with a more open, market-based economy and a more developed and diversified financial system.
The reforms we must both pursue to meet these very different challenges are not in conflict, and the strengths of our economies are still largely complementary. And we each recognize that our ability to work together is important to the overall health and stability of the global economy.
As President Obama said, no one nation can meet the challenges of the 21st century on its own nor effectively advance its interests in isolation. There’s a Chinese saying that reflects this same vision. In Chinese, it reads – (in Chinese). In English, roughly, for share fortunes together, meet challenges together. We are making progress and I am confident we will continue to do so.
Thank you. Councilor Dai. (Applause.)
STATE COUNCILOR DAI: Thank you. (Via interpreter) Dear friends, just now I heard from my colleagues said all that I have to say, so I would be brief.
Secretary of State Hillary Clinton, Secretary of the Treasury Timothy Geithner, Vice Premier Wang Qishan, ladies and gentlemen, dear friends, it is a great pleasure for me to join you at the third round of the China-U.S. Strategic and Economic Dialogues here in Washington. We meet at a unique point in the history of China-U.S. relations, as this year marks the 40th anniversary of the Ping Pong Diplomacy and of Dr. Kissinger’s secret visit to China. Forty years ago, the desire of the Chinese and American people for friendly interactions, together with the decisiveness and the courage of our political leaders, produced an unstoppable force of history. It pushed open the door of engagement between our two countries that had remained shut for over 20 years. Since then, no force in the world has ever had the power to close that door again.
Today, as we review the past and look ahead to a better future of China-U.S. relations, we cannot but pay high tribute to those icebreakers, pioneers, and the builders of China-U.S. relations. More importantly, we shall learn from their foresight and the pioneering spirit because we have to bring China-U.S. relations forward.
The China-U.S. relationship, too, is at an extremely important point in history. President Hu Jintao and President Obama met in Washington this past January, a time when we have just entered the second decade of the 21st century. Together, the two presidents decided to build a cooperative partnership based on mutual respect and mutual benefit, charting a clear course for the future of China-U.S. relations. History will show that the decision they made is a historic one that accords with the tide of history and serves the benefit of the people of China, the United States, and the world.
Admittedly, it is no easy task to make this major decision a living reality and turn commitment into real actions, as we may face all sorts of difficulties, obstacles, and interference on the way ahead. I’m confident, however, that so long as both sides grasp the right trend of the world and of China-U.S. relations in the 21st century, stick to the directions set by our presidents with resolution, and never waver in our determination to overcome whatever difficulty is coming our way, we will blaze a new path of major country relations featuring mutual to respect, harmonious coexistence, and a win-win cooperation so that our people and our future generations will live in the sunshine of lasting peace, friendship, and cooperation.
I’m standing here addressing you as a 70-year-old man. I may not look that old. Actually, I’ve turned 70, an age when I should have gone home and enjoyed the company of my children and my grandchildren. Why then am I still flying across the Pacific and sitting in round after round of candid and heart-to-heart dialogues with my American partners? I’m doing this to implement the consensus of our presidents for the achievement of one lofty goal – to make our two countries and the peoples forever good friends and good partners, and to enable our children and children’s children to live in peace and happiness. Could we ever let them down? The answer is no, a definite no. If we do, we would be failing our duty and that would be unforgiveable.
Dear friends, the people of China and the United States live in the same global village – you on the West side, we on the East. I welcome more American friends to visit China, to see and feel for yourselves the friendship of the Chinese people and the importance of China-U.S. relations. You may also learn firsthand the enormous progress China has made in various fronts, including in human rights, and get to know what is a real China.
To conclude, I wish this round of dialogues full success. Thank you. (Applause.)