President Hu Jintao welcomes US Treasury Secretary Timothy Geithner at the opening session of the China-US Strategic and Economic Dialogue in Beijing on Thursday as US Secretary of State Hillary Clinton and Vice-Premier Wang Qishan look on. Xu Jingxing / China Daily

Beijing and Washington must set their own destiny, president says

President Hu Jintao on Thursday called on China and the United States to escape from the outdated thinking that major powers are predestined to engage in conflict.

Hu also said that the two countries should seek new ways to enhance their relations in remarks he made at the opening session of the China-US Strategic and Economic Dialogue in Beijing.

"Whatever changes may take place in the world, and no matter how the domestic situations in our two countries may evolve, China and the US should be firmly committed to advancing a partnership of cooperation," Hu said.

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They should also strive to build new relations to reassure people from China and the United States and across the world, he said.

"We should, through creative thinking and concrete action, prove that the traditional belief that big powers are bound to enter into confrontation and conflict is wrong and seek new ways of developing relations between major countries in the era of economic globalization," he said.

The president also called for the US and China to respect each other's concerns and warned that any worsening of relations posed "grave" risks for the world.

"Given the different national conditions, it is impossible for China and the US to see eye-to-eye on every issue," the president said.

The fourth round of the dialogue started Thursday morning in Beijing.

Vice-Premier Wang Qishan and State Councilor Dai Bingguo joined US Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner to co-chair the annual talks on economic policies and major international issues.

Ministerial-level officials from more than 20 government agencies, from both countries, attended the gathering. Foreign policy, climate change, energy security, Sudanese tension and security in Southeast Asia, were among the issues discussed.

Clinton read a letter from US President Barack Obama at the opening ceremony. She also stressed, in her speech, that although Beijing and Washington cannot solve all the problems of the planet, no major problem would be settled without their cooperation.

The importance Chinese and US leaders attached to the dialogue indicates both countries have realized that lack of trust is a serious problem, Niu Xinchun, a specialist on American studies at the Chinese Academy of Social Sciences, said.

Qu Xing, director of the China Institute of International Studies, said the scale of the talks this year has been narrowed due to the US election.

"However, it has still brought half of the Obama administration's senior officials to China. No other dialogue in the world can compare with it," he said.

Kenneth Lieberthal, director of the John L. Thornton China Center at the Brookings Institution, said that the annual meeting takes place in a very political year, both in the US and China. "The real objective, at this point, is to prevent bad things from occurring but not to make major progress in the relationship."

He also noted that this is the last meeting of the four co-chairs. "At least three of the four will not be in their offices next year, so that will also give this meeting a kind of wrap-up style," he said. "We should begin the process to review the structure and dynamics of the dialogue and see if some modifications should be made."

David Lampton, director of the China Studies Program at the Paul H. Nitze School of Advanced International Studies, Johns Hopkins University, said the meeting had come at a critical time.

"The US-China relationship is overloaded. It's like a truck and more and more keeps getting loaded on," he said.

"This is probably the most complicated period I've seen since 1979."

The London-based Financial Times said in an online editorial on Thursday that the world is in urgent need of cooperation between Beijing and Washington.

Yuan flexibility

The US government welcomed Beijing's move in April to widen the daily trading band within which the yuan is allowed to fluctuate from 0.5 percent to 1 percent.

But it didn't go far enough and create a market-driven exchange rate, AP cited an unnamed senior official with Geithner's delegation as saying on Thursday.

Chinese officials, however, believed that the yuan was not undervalued.

"Given that China's global trade is basically balanced while running a surplus with the US shows the exchange rate plays a minimal role in trade," said Minister of Commerce Chen Deming.

China reported a $5.3 billion surplus in March, down from a monthly level of at least $15 billion for most of 2011, statistics from the General Administration of Customs showed.

According to central bank governor Zhou Xiaochuan, the renminbi did have room for appreciation when China had a big current account surplus few years ago.

"But now the surplus has largely shrunk, and the market's expectation for yuan appreciation has also changed," Zhou said.

China's current account surplus dropped to about 2.8 percent of GDP in 2011 from over 10 percent in 2007.

"If there is an imbalance in the exchange rate, the market has the power to correct it," Zhou said.

The exchange rate for the renminbi reached a new high against the US dollar on Wednesday, hitting 6.2670, according to the central parity rate for the yuan set by the People's Bank of China.

Contact the writers at lixiaokun@chinadaily.com.cn, huyuanyuan@chinadaily.com.cn and tanyingzi@chinadailyusa.com

Xinhua, AFP, Zhou Wa in Beijing and Ma Liyao in New York contributed to this story.