China worked closely with the United States to bring North Korea to the negotiating table last fall and now sits with us at the four party talks in the common pursuit of a permanent peace. China and the U.S. have worked similarly well together on South Asia, with both nations seeking to roll back escalating tensions on the Indian subcontinent. The caliber of our strategic cooperation has thus improved substantially. The twin challenges now, as we try to give substance to the notion announced last year of moving towards a constructive strategic partnership, are to broaden the number of areas in which we can identify common cause and to establish a mechanism for moving from shared interest to joint action. But even as the U.S. and China find new ways to move forward with strategic cooperation, we must also make progress on resolving difficult problems.
Human rights is an important case in point.
Despite the progress achieved in the wake of the two summits, the Administration is deeply concerned about the recent arrests and prosecution of prominent democracy advocates. In short, resumption of political reform in China is, in my view, a necessary precondition for successful modernization. To touch upon only one more problem area, the U.S. and China also face a whole coterie of contentious trade issues. The U.S. trade deficit with China was increasing dramatically even when China was growing around 9 percent per year. With the deterioration in China's growth prospects, the gap is now widening.