US-China Annual Bilateral Discussions Kicks Off To Eradicate Differences In Security And Economic Issues

Jacob Lew, the US Treasury Secretary has come down heavily on Chinese Industrial policy and a concerned law regulating foreign non-profit groups. The warning has been made while addressing the inaugural session of annual bilateral, wide ranging discussions on security and economic policy. John Kerry, the US Secretary of state has also expressed concern over the NGO law that empowers police to supervise foreign businesses.    

Innovations from NGOs help addressing critical human needs while encouraging for larger economic success. China’s recently passed Foreign NGO Management Law is creating an unwelcoming environment for the overseas innovators, reports The Wall Street Journal quoting the US Treasury Secretary.

The Treasury Secretary has also called China upon reducing its excess steel capacity since it distorts global markets. China is acknowledged as the world’s largest steel producer and allegedly sells produce below market prices. The over capacity exerts corrosive impact over the Chinese economy. US officials are discussing different bilateral issues in the ongoing US-China Strategic and Economic Dialogue enduring two consecutive days, according to a report published in BBC.  

The US intends pressing Beijing to move faster with plans to reduce excess production capacity. Trading partners of China alleges that the excess production is causing over supply of low cost steel into their markets eventually threatening thousands of jobs. To tackle the over supplied market, Washington has already imposed anti-dumping tariffs on steel. EU officials have also been investigating the market situation, reports South China Morning Post.

During the opening session of the annual talks, disagreement between these two powers ranging from market access to cyber security has emerged. Disagreement transforms into tensions over China’s aggression in the disputed South China Sea region.

US moves challenging Chinese claims while supporting allied countries to add odds with Beijing. Chinese President Xi Jinping has urged to strengthen mutual trust between the two parties through regular communications in a view to avert strategic misjudgment.

Xi has also warned averting diplomatic tensions that disrupts mutually beneficial trade and other relations. Though the differences are hardly unavoidable, but Xi has urged US to help handle them in more pragmatic and constructive fashion. He has emphasized on refraining from considering those differences as excuse for confrontation.

Washington intends China moving faster reducing a growing corporate debt burden. Analysts fear, the rising debt burden may hamper Chinese economic growth. During the meeting, the US officials urge their Chinese counterparts to ease market access for financial and other services. Foreign business groups repeatedly complain that China has been trying to shield local businesses, which is simply violation of free trade agreement.

Meanwhile, steel producers in Europe has expressed their deep concerns over low cost Chinese steel produce since such imported materials have flooded their market. Over supply of low cost steel product eventually causes debacle in prices.

Tata Steel’s announcement during earlier this year for selling its loss making UK steel business reflects the market scenario perfectly. The announced move has put thousands of direct and indirect steel workers at the risk of loosing jobs.

Tata’s UK business arm has cited global over supply of steel and imports to Europe from China as the two major reasons behind the business collapse. Notably mentioning, imports of Chinese steel in the UK has been increased from 303,000 tonnes in 2013 to 687,000 tonnes in 2014.