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Week In News: Dissident Puts Kink In Economy Talks



SECRETARY HILLARY CLINTON: As President Obama said this week, a China that protects the rights of all its citizens will be a stronger and more prosperous nation and, of course, a stronger partner on behalf of our common goals.

RAZ: Secretary of State Hillary Clinton speaking from Beijing this week where she was visiting for the U.S.-China strategic dialogue talks. These are two days of annual meetings held between Washington and Beijing. And this year, of course, those talks were overshadowed by the events surrounding the dissident Chen Guangcheng.

But James Fallows of The Atlantic who writes often about China was watching those talks closely. And, Jim, first of all, explain the backstory to these annual talks.

JAMES FALLOWS: Yes. This is a legacy of the George W. Bush administration where under mainly the impetus of then Secretary of the Treasury Hank Paulson, they decided it would be good to have a regular annual occasion for getting together at the highest levels between the Chinese and the American government. So it was called then the strategic economic dialogue talks. Now, with the different emphasis of the Obama administration, it's the strategic and economic dialogues. And it's mainly a way to have a routine guaranteed forum to resolve a lot of the always difficult issues between the two countries.

RAZ: And, of course, not just Hillary Clinton was there, but Treasury Secretary Tim Geithner. And does the U.S. do this with any other country in the world?

FALLOWS: Not in this forum because there's no other relationship just like the one between the U.S. and China. In dealings with NATO, which is a very friendly relationship, and dealings with the Soviet Union in the old days as an overall very hostile relationship, this is a unique interaction in that it's both cooperative in many ways and hostile and confrontational in some others. And so I think that's the special role of these discussions.

RAZ: Obviously, the case of Chen Guangcheng dominated the news coverage of what happened there, but there were things that did actually happen. What was the U.S. after in those talks?

FALLOWS: The agenda for Hillary Clinton would have been to seek China's broader engagement on a range of international issues, to have its help in Syria, with Iran and North Korea and with Burma and all these other areas where the Chinese government - its natural inclination would be to avoid doing anything.

On the Treasury secretary's side, the agenda would have been things like the value of the Chinese currency, intellectual property protection in China. The talks were mainly on those two fronts.

RAZ: What did they achieve?

FALLOWS: From the initial reports, as if the Chinese gave a lot of what the U.S. was looking for, especially on the economic realm. The Chinese government announced that the giant state-owned enterprises that play such a large role in the Chinese economy would have to start paying dividends. If they didn't have to pay dividends, essentially that was a built-in war chest that they could use to subsidize a lot of their efforts worldwide.

In the last month or so, the Chinese central bank has significantly increased the trading range for the Chinese currency, and the equivalent of their export-import bank has agreed to ream back some of the export subsidies that both the Europeans and the United States have been complaining about a lot.

RAZ: Jim, for years now, the thinking among U.S. policymakers was, you know, you open our markets to China, and that will create a Chinese middle class. China will have to liberalize, become more democratic. That, clearly, has not happened. The latest State Department human rights report about China was pretty damning.

FALLOWS: Yes. The crudest version of that equation, which we heard a lot of, say, 20 or 30 years ago, which is more trade would mean a democratic China, that clearly is not true. There's a refined version of it, which actually does become important for China in the next generation or two, which is whether its move from this low-wage manufacturing economy to a more sophisticated prosperous one will require a kind of opening the government has not been able to do so far. And that is - we'll see how that unfolds.

RAZ: That's James Fallows of The Atlantic. He joins us here most Saturdays. Jim, thanks for coming in.

FALLOWS: Thank you, Guy. Transcript provided by NPR, Copyright NPR.