"Strategic Talks" Leave Chinese Delegates Very Unhappy

May 25 (LPAC)--A Chinese diplomatic contact, privy to the thinking of the Chinese delegates to the latest round of the US-China Strategic Dialogue, indicated that the Chinese delegation was far from happy with the results. The "dialogue" was set up by former Deputy Secretary of State, Robert Zoellick, with a desire to make China a "stakeholder" in the international financial system, i.e. to get them to adhere more closely to the demands of "the market." Treasury Secretary Hank Paulson had upgraded these talks to a ministerial level, in which the cumulative power of the U.S. Government could be brought to bear on the Chinese, with the participation of such "big guns" as Paulson, Ben Bernanke, Commerce Secretary Guitterez, and U.S. Trade Representative Susan Schwab.

This second session of the Dialogue, held here in Washington, started off on a sour note after the U.S. had imposed tariffs on some Chinese goods. There were indications that the Chinese delegation might not even come because of these punitive measures, the Chinese arguing, quite effectively, why have a "strategic dialogue" if the U.S. is going to act unilaterally anyway. The Chinese Government had bent over backwards to make the dialogue with the U.S. work, the contact told EIR , in spite of the difficulties. "But there are others in Beijing who don't believe that the U.S. is willing to cooperate, and they're advising more emphasis on relations with other countries and less stress on the U.S. relationship," he said. The U.S. measures, he indicated, really served to undercut the position of those who want the dialogue.

While both parties issued statements after the meetings on Thursday that were generally 'upbeat,' the discontent among the Chinese delegation was palpable, the contact said. Chinese spokesmen also underlined that it would be their decision when, and by how much, the renminbi might be revalued. The U.S. would like to have the value of the renminbi raised in an effort to artificially reduce the U..S. trade deficit. There was obviously an effort by the U.S. during the talks to get the Chinese to move more on this issue, portraying themselves as 'friends' who have to deal with a less friendly Congress that is demanding more of China on the trade front. In his press conference yesterday, President Bush said that China should open its economy more to foreign ownership, a move which would subject the Chinese economy to the same type of plundering that has occurred in other parts of the developing world. Paulson characterized the results of this session of talks as "incremental."