U.S. TREASURY DEPARTMENT OFFICE OF PUBLIC AFFAIRS

FOR IMMEDIATE RELEASE, June 18, 2008

CONTACT Brookly McLaughlin, (202) 622-2920 

 

Joint U.S. – China Fact Sheet 

Fourth U.S.–China Strategic Economic Dialogue 

At the U.S. Naval Academy in Annapolis, Maryland on June 17 and 18, the United States and China 

held the fourth Strategic Economic Dialogue (SED). As special representatives of President George W. 

Bush and President Hu Jintao, Treasury Secretary Henry M. Paulson, Jr. and Vice Premier Wang Qishan 

served as co-chairmen of the SED. 

Discussions at the fourth SED meeting led to a number of results in areas of strategic importance that 

strengthen and deepen the bilateral economic relationship, including: 

I. Macroeconomic Cooperation and Financial Services 

The United States and China reaffirm their commitment to continue working together to achieve 

sustained growth, maintain price stability, and ensure the smooth and orderly functioning of their 

financial systems, and agree to continue their cooperative approach to information sharing on financial 

services issues of mutual interest, and to consider further how to deepen cooperation to safeguard global 

financial stability. Moreover, the United States and China took the following actions and made the 

following commitments: 

• The United States published an assessment of the causes of the current global financial market 

turmoil and its recommendations for financial services firms and regulators to strengthen their 

operations and procedures and plans to issue a follow-up statement later this year that will assess 

progress towards implementation of these recommendations and consider whether further steps are 

needed; 

• China will complete, by December 31, 2008, an assessment of foreign participation in China’s 

securities, futures, and fund management firms, and based on the results of its assessment, make 

policy recommendations on adjusting foreign equity participation in China’s securities market; 

• The United States has proposed new regulations that are consistent with the International 

Organization of Securities Commissions revised Code of Conduct for Credit Rating Agencies, to 

strengthen their procedures to protect the integrity of the ratings process, help ensure that investors 

and issuers are treated fairly, and safeguard confidential material information provided; 

• China will allow existing credit rating agency (CRA) joint ventures to apply to qualify for a 

securities-related credit rating business without a reduction in their existing percentage foreign 

equity stake, following entry into force of new U.S. CRA regulations, at which time registered 

CRAs must comply fully. CSRC will consider these applications in accordance with its prudential 

regulations; 
• The United States reiterated its commitment to open financial markets, apply national treatment to 

Chinese banks and process expeditiously applications by Chinese banks to establish branches in 

the United States, in accordance with relevant prudential regulations and procedures, without 

undue delay; 

• China allowed, on a pilot project basis, non-deposit taking foreign financial institutions to provide 

consumer finance to local retail customers in China; agrees to reduce the lockup period for the 

invested principal of Qualified Foreign Institutional Investors (QFII) to 3 months for insurance 

companies, government and monetary authorities, mutual funds, pension funds, charity funds, 

donations funds and open-end China funds established by QFIIs; and will allow qualified foreign 

companies to list on its stock exchanges through issuing shares or depository receipts in 

accordance with relevant prudential regulations and allow qualified foreign incorporated banks to 

issue subordinated RMB-denominated bonds; 

• U.S. Department of Agriculture (USDA) will explore means to further cooperation on agricultural 

insurance with China, and will consider providing training for Chinese officials and industry 

representatives who seek to develop China’s insurance policies in the areas of insuring crops and 

livestock from damages, including those caused by natural disasters.; and 

• China and the United States had positive discussions on the proposed regulation on 

“Administrative Method of the Equity Interest in Insurance Companies” during the comment 

period, and in particular, on the issue of the U.S. concern that foreign insurance institutions may 

invest in a new or existing domestic insurance company without regard to whether that institution 

has already invested in the same insurance sector in China. China will consider fully comments 

timely submitted from all parties, and continue to consult as appropriate. China recently issued 

regulations which specify relevant CIRC requirements to allow insurance companies in China 

(“Measure for the Overseas Investment with Insurance Funds”), including foreign-invested 

companies, to invest a certain proportion of their assets overseas. 

II. Investing in People and Product Quality and Food Safety

The United States and China had substantive discussions on how best to work together to mitigate the 

economic risks associated with the aging populations in both countries and to provide better social 

services such as health care and retirement. In addition, building on the significant progress made at the 

third SED meeting on product quality and food safety, the United States and China committed to further 

strengthen our cooperative efforts. To this end, both countries: 

• agree to continue discussing China’s export product quality and food safety control system and to 

strengthen cooperation on inspection, quarantine, and safety of designated products; 

• will sign a 2008 work plan to implement the Memoranda of Agreement on the safety of drugs and 

medical devices between the Food and Drug Administration within the U.S. Department of Health 

and Human Services (HHS) and China’s State Food and Drug Administration (SFDA); 

• signed a joint progress statement regarding the joint Five-Year Work Plan under the Agreement on 

the Safety of Food and Feed between HHS and China’s General Administration of Quality 

Supervision, Inspection, and Quarantine (AQSIQ); 

• continue discussions to sign a Memoranda of Understanding between the U.S. Department of 

Agriculture and AQSIQ on food safety; 

• signed a Memorandum of Understanding on Collaboration in Traditional Chinese Medicine; and 

• commit jointly to explore cooperation in disaster preparedness, forecast and mitigation. 

• agreed on the importance of improving consumer confidence in the safety of products and drugs 

and reached consensus that we should place U.S. Department of Health and Human Services/Food 

and Drug Administration personnel at the U.S. Embassy and the relevant Consulates General in 

China and General Administration of Quality Supervision, Inspection and Quarantine and State 

Food and Drug Administration personnel in the Chinese Embassy and the relevant Consulates 

General in the United States, and agreed to work out detailed arrangements. 
III. Cooperation on Energy and the Environment 

Recognizing that energy and environmental challenges represent two of the most important policy issues 

facing our two countries in the twenty-first century, and the importance of joint cooperation in 

addressing these challenges, the United States and China committed to strengthen long-term 

cooperation on energy and the environment. To this end, both countries: 

• signed a Ten Year Energy and Environment Cooperation Framework and announced the first five 

goals to be addressed under the framework, established five task forces and launched action plans 

focused on concrete cooperation for each goal, with the aim of completing all of these action plans 

by SED V, and also initiated discussion on exploring the concept of EcoPartnerships by SED V; 

• agreed on the critical relationship between energy security, economic growth, and environmental 

protection, and on the importance of exploring energy efficiencies, alternative fuels, and next 

generation technologies; and agree to recognize the importance of ensuring responsible and 

transparent energy exploration and development that minimizes the negative impact on the 

environment and through bilateral dialogue will give full effect to the energy security principles 

embraced at Aomori, Japan in the Joint Statement of the Five-Party Energy Ministers on June 7, 

2008 and the Joint Statement of Energy Ministers by the G8 Plus 3 on June 8, 2008; 

• agree to strengthen cooperation with the International Energy Agency (IEA) on areas of mutual 

interest to address energy security issues of common concern, including global energy markets, 

strategic oil reserve, energy diversification, energy efficiency and clean energy technology, and 

agree that in times of oil supply disruption, to consider voluntary participation in the joint action of 

IEA member countries, building on the previous commitments made at the third SED meeting and 

the Joint Statement of the Five-Party Energy Ministers on June 7, 2008 at Aomori, Japan; 

• agree to share information and experiences on technologies and supervision methods related to 

waste utilization and disposal; 

• agree to continue bilateral exchanges on the scope of product coverage and on the modalities for 

tariff reduction or as appropriate elimination, so as to facilitate achieving a comprehensive WTO 

agreement on environmental goods and services; and 

• agree to explore establishing a mechanism for regular information exchange on timber and forest 

products trade and timber legality identification, to enhance legal trade in timber and forest 

products and global forest law enforcement and governance; agree to discuss in June the transfer to 

China applicable technology and equipment for forest fire prediction, warning, monitoring and 

suppression; agree to promote global sustainable forest management utilizing each side relative 

strengths. 

IV. Trade and Competitiveness

The United States and China discussed the challenges of trade in the next decade and actions that should 

be taken to ensure that our economies remain competitive in an economic environment shaped by 

globalization. To this end, both sides: 

• will work together with other WTO members to actively promote the conclusion of Doha 

Development Agenda negotiations, with the view to facilitating the development of the multilateral 

trading system; 

• agreed to intensify cooperation on IPR protection through the IPR Working Group under the JCCT 

as soon as possible after the close of SED IV and prior to the 19th JCCT. Both sides agree to start 

the above mentioned cooperation with an introduction of China’s recently published “Outline of 

National Intellectual Property Rights Strategy” and “Plan for IPR Protection Initiatives in 2008,” 

and both sides may discuss issues that are not related to the claims of the current WTO dispute 

settlement; 
• signed a Joint Declaration on Transportation Cooperation that establishes a forum for both 

countries to discuss challenges and future cooperation in transportation; 

• further agreed to hold regular government-to-government meetings of U.S. and Chinese agencies 

responsible for government policies that relate to innovation, and host a public-private discussion 

between the fourth SED and fifth SED meetings and agree that there is mutual benefit in exploring 

cooperation on joint activities in research and development in science and technology; 

• discussed China’s market economy status and the United States recognized the continued progress 

China has made in its market reforms, will earnestly consider China’s concerns, and will consult 

through the JCCT in a cooperative manner to work toward China’s Market Economy Status in an 

expeditious manner; 

• agreed to continue consultation through the JCCT and other channels on trade remedy rules and 

procedures; 

• will continue to conduct cooperative discussions on high-tech and strategic trade issues in the 

U.S.-China High Technology Working Group (HTWG) under the JCCT. The United States and 

China are committed to facilitating civilian high-tech trade as agreed in the “Guidelines for U.S.-

China High Technology and Strategic Trade”; 

• agreed to strengthen cooperation on Rules of Origin, Customs Trade Partnership Against 

Terrorism (C-TPAT), and the protection of cultural relics; and 

• The United States and China recognize the significant steps both countries have taken to enhance 

transparency. Building upon their SED III transparency commitments, the United States and 

China agree to publish in advance for public comment, subject to specified exceptions, all trade 

and economic-related administrative regulations and departmental rules that are proposed for 

adoption and provide a public comment period of not less than 30 days from the date of 

publication. China agrees to publish such measures in the Chinese Government Legislative 

Information Website of the Legislative Affairs Office of the State Council, and the United States 

agrees to publish such measures in the U.S. Federal Register. The two sides also agreed to 

continue exchanges on transparency in administrative rule-making and licensing, and to invite 

representatives from their legislative and judicial organs to appropriate future meetings. 

V. Investment 

In light of the potential for a substantial increase in bilateral investment flows, the United States and 

China agreed to a number of steps to facilitate mutually beneficial investment between the two 

countries. To this end, both sides: 

• agreed to launch negotiations on a bilateral investment treaty in the interest of facilitating and 

protecting investment and enhancing transparency and predictability for investors of both 

countries; 

• agreed to a framework and work plan for the Investment Forum at their first meeting on June 16. 

The Forum will focus on practical investor concerns, such as the process of investment reviews 

and potential investment barriers; and 

• agreed to create an Investment Promotion Initiative that features a series of investment activities in 

both countries that bring together interested parties. 

In addition, the United States welcomes sovereign wealth fund investment, including from China. China 

stressed that investment decisions by its state-owned investment firms will be based solely on 

commercial grounds, and the United States will fully consider any written comments submitted by 

China on the proposed “Regulations Pertaining to Merger, Acquisitions and Takeovers by Foreign 

Persons,” and confirms the CFIUS process ensures the consistent and fair treatment of all foreign 

investment without prejudice to the country of origin. 

The fifth SED will be held in Beijing in December 2008.