Paulson to Next Adminstration. Keep the US China Strategic Economic Dialogue (SED)Monday, October 6, 2008 20:15
In Foreign Affairs this month comes a piece by US Treasury Secretary Henry Paulson called A Strategic Economic Engagement Strengthening U.S.-Chinese Ties .
A state of affairs piece, the message throughout the article is clear.
Regardless of who will be the next President of the United States, the SED needs to remain in place.
With one of his major mandates to improve the economic relationship between the two countries, a large part of Paulson’s legacy will be tied to the SED (US China Strategic Economic Dialogue). He was questioned by many in the early days, but as the dialogues between himself and his counterparts continued it became clear that there was real progress coming through the platform (there were some misses as well).
He had hurdles to overcome, one of the largest was to sell in the US the Chinese position:
To be effective, however, Washington must first understand Beijing’s interests and the challenges it faces. The Chinese see economic growth as essential to their stability. Three decades of economic development have transformed their country, bringing it peace and stability and lifting hundreds of millions of people out of poverty. The Chinese are deeply proud of these accomplishments yet are concerned about their ability to sustain them. Their leaders, meanwhile, realize that China’s future growth depends on its increasing integration into global trade, investment, and financial markets.
and to build the relationships and trust between the two parties
U.S. officials are more effective when they understand the Chinese people’s perspective. This is one reason why I travel to China so often; nothing can substitute for personal interactions with top decision-makers, especially in China, where respect and friendship are particularly prized. My counterparts in the SED, Vice Premier Wang Qishan and, before him, then Vice Premier Wu, have emphasized the importance of mutual trust. Establishing relationships at the top of the Chinese government has been key to the U.S. government’s success with the SED.
and through this process:
Since Washington stepped up its economic engagement with Beijing through the SED two years ago, the U.S.-Chinese relationship has deepened and expanded. By encouraging top-level discussions of the two countries’ long-term strategic priorities, the SED has found effective ways to manage short-term tensions surrounding trade disputes. It has alleviated a complex set of concerns in the U.S. Congress in a way that has led to a significant appreciation of the renminbi and forestalled dangerous protectionist legislation.
For his part, Paulson gives a lot of credit to SED and its successes, and I would generally agree with his assessment. Early on there was a lot of pressure for short term results, but he was able to hold off the pressure and bring about results. Although, he would surely like to have accomplished more on the RMB, Paulson believes that if the next administration takes the baton and runs with it, it can achieve a lot more.
I have learned firsthand that the United States is much more effective at resolving global issues when it approaches them multilaterally rather than unilaterally. On every major economic, political, and security issue, the path that China chooses will affect the United States’ ability to achieve its goals. This will also be true under the next U.S. administration. The SED must be used to help manage the myriad economic issues that will undoubtedly arise and help keep the vital U.S.-Chinese relationship on an even keel, productively advancing shared interests while working through enduring differences. It is possible to manage these challenges in a way that advances both U.S. and Chinese interests. And it is my hope that the next U.S. president will expand on the SED to take U.S.-Chinese relations to the next level.
and I would agree on all counts and encourage you to read the entire article for yourselves. It is a bit congratulatory in some areas, but I would fully support his assessment that the SED is a needed platform, and will be more effective in the next administration should they work together in the same manner as the last 3 years.