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U.S. Department of State, "Preview of the First Joint Meeting of the U.S.-China Strategic and Economic Dialogue," July 23, 2009.

July 23, 2009

Preview of the First Joint Meeting of the U.S.-China Strategic and Economic Dialogue
FPC Briefing
Senior Administration Officials
Foreign Press Center
Washington, DC

July 23, 2009

11:15 a.m. EDT

SENIOR administration OFFICIAL: Guys, thanks for coming. On Saturday, we’re going to have more than 150 Chinese officials come in a delegation that’s going to be led by Vice Premier Wang Qishan and State Councilor Dai Bingguo. And this is going to be one of the largest and high-level official Chinese delegations ever to come to the U.S.

And my State Department colleagues are going to talk about the political and strategic part of the discussion. We’ll talk about the economic aspect to it. But I think the fact that the Chinese are sending such a high-level and such a large delegation signals the importance they put on engagement in the bilateral relationship right now.

When Secretary Geithner was in Beijing last month and he met with senior leadership, it was very clear that they believe that the economic downturn has made them realize that their economic destiny is tied to ours. There is no decoupling. And a big focus of the discussion going forward next week is going to be about what both sides can do to strengthen the recovery, and also change the fundamental direction of our economic development strategies going forward.

Perhaps the most important message that we’re going to have for the Chinese is that there’s been a fundamental change in the U.S. economy. The U.S. economy is going to recover, but the recovery is going to be a different type of recovery from what the Chinese have seen in the past. U.S. households are raising their savings rates, so this is going to be less of a consumption-led recovery than what they’re used to. And our message to the Chinese is going to be: If you want to achieve your growth objectives, you’re going to have to find a different way of doing it than through export-led growth.

The Chinese have been making progress – not fast enough, not intense enough, but some progress in transforming their economic growth model away from dependence on exports, dependence on capital-intensive, heavy industry that’s resource-intensive, that’s carbon-intensive.

But our main message, again, to them is that you need to understand, China, that it’s not so simple as to put in place a very aggressive monetary and fiscal stimulus, which they’ve done, and has been a very important factor for the stabilization of the global economy and global financial markets. But it’s not as simple as putting in place a stimulus bridging over a couple years until you get back to the old days, where you can export into a consumption boom in the U.S. and other parts of the global economy.

So we’re going to talk a lot about what China needs to do to restructure its economy and produce, in particular, more consumption-led growth. We’re also going to spend quite a bit of time talking about lessons from the financial crisis. We want to make sure that China draws the right lessons and not the wrong lessons, and that China continues on the path of financial innovation, financial development, financial opening up.

Again, it’s a very important part of the rebalancing agenda too. If Chinese households and businesses can have access to a broader array of financial assets, that’ll be another reason why Chinese households will be able to reduce their savings and consume more. And again, all this ultimately gets back to jobs in the U.S. if the Chinese can increase their consumption, reduce their trade surplus. That’s going to mean more exports, U.S. exports, more U.S. jobs.

Two other issues that we’re going to talk about – one is reforming our international economic and financial institutions, first and foremost, working together with China to make sure that these institutions, like the International Monetary Fund, the World Bank, and other institutions have the resources to combat the current crisis, and as importantly, have the structure and resources to make sure that they’re able to put out financial fires in the future. But also it’s very important to both us and China that we reform the governance of these institutions to give China and other of the dynamic emerging market economies a weight, a role in the governance of these institutions that’s more commensurate with their weight and their position in the global economy.

It’s very important for the legitimacy of these institutions. It’s very important for the effectiveness of these institutions. It’s very important to bring China fully into the governance of the global financial and economic structure that the U.S. largely created in the post-war period. And the last issue that we’re going to talk about is making sure that both sides intensify their efforts to maintain open trade and investment policies.

I’ll just highlight two issues that are going to be on our agenda. One is government procurement, and both China and the U.S. had very aggressive fiscal stimulus programs. We understand that whenever you’re spending public funds, there’s understandably going to be force to keep that money at home. I think both China and the U.S. understand the importance of nondiscriminatory procurement policies. We’re all better off if U.S. companies can sell to the Chinese Government, and Chinese companies can sell to the U.S. Government.

But the problem we have is China is not yet a member of the WTO Government Procurement Code. This wasn’t an issue back in the early ‘80s, when the Government Procurement Code was signed. China was an insignificant part of the government procurement market. Now we fast-forward 25 years later and China is not only a major supplier; it’s a major consumer of goods and services in the global government procurement market. China can no longer sit outside this system, so it’s very important – and again, we’re going to talk about intensifying our efforts to make sure that China gets in so it makes commitments to U.S. companies and U.S. workers that when it buys its goods and services, it’ll do so on a nondiscriminatory basis.

The last issue is investment. Foreign investment has been a huge driver of growth in both the U.S. and Chinese economy. We are concerned that we’re seeing a hardening of attitudes towards foreign investment in some sectors in China, and we’re going to stress the importance that China continue to maintain an open investment policy to U.S. companies. And we’re also going to talk about some of the concerns that they have.

China has always been an important platform for U.S. investment. The big change that we’ve seen in the last couple years is what the Chinese call their going-out policy. And China’s outward investment by Chinese companies is growing at a very, very rapid rate. I wouldn’t be surprised if, in the next few years, outward direct investment from China exceeds inward direct investment into China. And we are always going to protect our national security, but we also face the challenge that a lot of the investment coming from China is – for the foreseeable future is going to be coming from companies where their corporate governance just looks different from corporate governance of U.S. companies and European companies. And this is going to be a challenge that we’re going to have to work with.

So one of the things we’re going to talk about next week is how both sides can maintain open investment policies, how the U.S. is going to protect national security – that’s nonnegotiable – but at the same time, create a basis where Chinese companies can also come to the U.S. and create jobs in the U.S.

SENIOR ADMINISTRATION OFFICIAL: Okay. Maybe what I’ll do is talk a little bit about some of the structure and how this is going to work, particularly for those of you who are familiar with the strategic economic dialogue that Secretary Paulson ran under the Bush Administration and are wondering, how is the strategic and economic dialogue different from that, just in terms of how it’s going to operate.

And I think some of those structural differences actually lead to some important areas of substance that we hope to begin discussing Monday and Tuesday of next week. First, I mean, there was obvious differences. This is co-chaired by Secretaries Clinton and Geithner with their Chinese counterparts. And what we’re trying to achieve here is to have a discussion with our – with China that is broader, that is more strategic in many ways, focused across a full spectrum of political and security and economic issues.

And so whereas we’re still maintaining the sort of track structure, so to speak, there will be an economic track that Secretary Geithner will chair and there will be a strategic track that Secretary Clinton will chair. There will also be a so-called joint track the first part of the first day. It will be co-chaired by all four of the principals on the American and Chinese side.

The President – as the White House announced, the President will open the event Monday morning, and then we will begin our work jointly in a session that Clinton and Geithner will chair on the American side. And in that session, the idea of it is for us to discuss issues that are cross-cutting, that aren’t neatly stove-piped within our bureaucracy or within China’s bureaucracy, but that are really important issues in which the U.S. and China have common interest in trying to solve, and – but yet they’re very, very difficult issues.

So this year, one of the issues we’ll focus on will be on climate and clean energy. I’ll let one of my other colleagues speak a little bit more to the substance. But that’s an example of the kind of thing we want to use – while we’re using this forum, that hopefully, this year and then in the next year and the next year, and this will – this session will be – or this dialogue will be conducted once a year. That will be another key difference from the previous administration where it was once every six months. Once a year, we will come together and set sort of broad strategic direction for the relationship that will help guide the many other interactions that our cabinet agencies and the rest of our partners throughout the U.S. Government are having with China throughout the year.

But what we want to try to do in this plenary or joint session is to discuss some of the crosscutting issues, and climate and clean energy will be a very important part of that. Then in – I’ll speak to the strategic track. What we’ll get to is some – many of the issues that won’t be surprising to those of you in the room. Certainly, we look forward to discussing a broad range of global security issues – things like nonproliferation, counterterrorism. We’ll also discuss regional issues. The Secretary of State Clinton is on her way back right now from Asia, from the ASEAN and ARF meetings. So she looks forward to continuing many of the discussions that were started there with Chinese counterparts Monday and Tuesday.

But also, we’ll be discussing a whole range of sort of urgent challenges that are in the headlines every day, things like the DPRK, Iran certainly, Afghanistan, Pakistan. And we’re structuring our conversation in a way where – on the strategic side, where we obviously have larger discussions in which we will be able to present to one another some sort of basic policy outlines, but then also maintaining space for a more private or closed-in, smaller interactions in which we’re really hoping to build a genuine dialogue. And it’s not just going to be set piece exchanges, but something in which both sides can really try to exchange views openly.

In terms of just how we see this strategic and economic dialogue working within the broader U.S.-China relationship, I mean, I think it’s significant that we – that our President has decided to do it this summer. Certainly, from just a staff perspective, that was quite a logistical challenge to try to pull this off in just a matter of months. As my colleague mentioned, we’ve got quite a bit of Chinese friends coming, and it’s an enormous organizational effort as well as substantive effort.

But we really wanted to do this quickly and in the first part of the year because we see this as a beginning. This is – hopefully, after a successful two days, we will get off on the right foot in terms of the dialogue and that, for the next few years, as we do this moving forward. It’s a way to kind of begin an interaction that we will see pay off over time.

We see this as a beginning of a conversation. Certainly, it’s going to plug into the many other dialogues that our government has with China, as well as, obviously, the interaction that our leaders have and that our respective secretaries will continue to have with their counterparts. But it will be an important moment, because it’s two days in which senior officials from – certainly, our two departments, but also throughout the U.S. Government, with their Chinese counterparts, will be in the same place at the same time and ready to discuss the many important issues that our two countries face together.

So with that as just sort of a general background, I’ll turn to my colleague who can talk a little bit in more detail about some of the climate and energy issues.

SENIOR ADMINISTRATION OFFICIAL: Thanks very much. I thought I’d just be quite brief. I’m pleased that the U.S. and China have agreed to make clean energy and climate change a principal part of the upcoming S&ED and at that joint level that was just alluded to. This is actually the 30th anniversary this year of some form of U.S.-China cooperation on energy and the environment. And I think it’s, again, particularly notable and important that now that’s going to importantly include climate change.

Climate change is fundamentally the problem and clean energy is the solution. So these things –the two issues are inextricably linked, and that will be reflected in the upcoming meetings. Climate change represents, I think is apparent to all, a great challenge, also a great opportunity. There are huge risks, as scientists have made clear, and the U.S. and China, as the two biggest emitters of greenhouse gases in the world – the U.S. the largest historic emitter, and China now the largest emitter in the world and the largest going forward – are absolute critical to any solution to this issue. The problem can’t be solved without both of us.

At the same time, climate change represents an enormous opportunity. Again, clean energy is the solution, the transformation to a low carbon economy in our country, and China, and ultimately, globally, is the only way to solve this problem. And that transformation can be, and I think will be, a driver of economic growth in this century.

During the Monday morning session, the two sides will discuss domestic actions to reduce emissions and how the U.S. and China can work together towards strong international agreements in both of those issues. In the afternoon session, we will discuss how the combined ingenuity and market power of the two – of these two largest players can catalyze a transition to a low carbon economy that I was just talking about, and how the countries can work together to promote environmentally sustainable economic growth.

I have frequently been heard to say that the only path to truly sustainable development as we move forward, at this point, is low-carbon development. Given what we know about climate change, that’s the only kind of sustainable development there is. Those who would seek to build high-carbon infrastructure at the time like this is, I think, reminds one of the people who built typewriter factories back five years before the PC revolution. It’s a bad investment to bet on high carbon right now.

We will be focusing our conversation on advancing renewable energy, building industrial efficiency electric vehicles, and other – and more. Both of our countries must move, and I think both recognize that we must move beyond the old paradigm of just fossil fuel energy.

So I think the S&ED provides a very good opportunity. We’re looking forward – to have a discussion on both of these issues, clean energy and climate change, and their interaction and interrelation. And we look forward to a good discussion on Monday and Tuesday.

SENIOR ADMINISTRATION OFFICIAL: Just very briefly to follow on from what [Senior Administration Official] said, during their meeting in London in April, Presidents Obama and Hu said we wanted to pursue a positive, cooperative and comprehensive relationship. Secretary Clinton, during her earlier visit to Beijing, said our priorities in the bilateral relationship with China are the global economic crisis, regional security issues, and climate change. And the S&ED is a way of taking that agenda and getting together with multiple cabinet-level agencies on the American side, getting together with our Chinese counterparts, and approaching the relationship in a comprehensive way. So that’s where the comprehensive comes from in the positive cooperative and comprehensive statement.

Briefly, on the strategic track of the S&ED, the history is that the strategic track is basically a descendant of the senior dialogue which we started some years ago. Given the importance of U.S.-China relations in this Administration, and with the Chinese Government as well, we decided to raise the level at which we interact with the Chinese to the cabinet level. And for us, that’s Secretary Clinton and State Councilor Dai Bingguo.

We’re going to talk about – in the strategic track, we’re going to talk about bilateral relations and the way forward. We’re going to focus on areas in which we think we can expand our cooperation, as [Senior Administration Official] said, in areas like counterterrorism and nonproliferation. We’re going to talk about global issues, global governance, health and infectious diseases, sustainable development. And we’re going to talk about regional security issues like North Korea, Afghanistan-Pakistan, Iran, so that we can explore area – concrete areas in which we not only share common interests, but in which we can cooperate together.

We’re just starting – with the exception of North Korea, we’re just starting in these areas. And we hope to lay a foundation in the strategic track for further productive exchanges with the Chinese on these issues. Human rights, of course, will be discussed. We’re going to talk about human rights. We’ll talk about Tibet. We’ll exchange views on the recent violence in Xinjiang as well.

So again, this is a first step. There’ll be a lot of agenda-setting. We hope the strategic track provides us with a framework within which we can carry forward and explore areas in which we have common interests with the Chinese and in which we can look for, as I say, concrete ways of cooperating in those areas.

MODERATOR: As we take questions, I ask you to wait for the microphone. We have them on each side, so give your name and the name of your media organization. We’ll take questions now. We’ll start here in front.

QUESTION: Thank you. Xiong Min from 21st Century Business Herald. It’s a paper in China. First of all, what kind of tone do you want to set from the first strategic and economic dialogue for the future relation of U.S. and China? And secondly, can you tell us who are the secretarial-level representatives from both sides that are going to be on the table from both U.S. and China? And especially curious about – on the climate change subjects, who are you going to deal with, what issues and what’s going to be your – you know, who are you going to talk with?

And the thing you mentioned about the investment, the bilateral investment and negotiation, can you elaborate more about what kind of national security concern that you are thinking of? Thank you.

SENIOR ADMINISTRATION OFFICIAL: Yeah. I mean, I can start on the tone. There’s like, four questions there, but I’ll do the --

SENIOR ADMINISTRATION OFFICIAL: I can jump in on the (inaudible).

SENIOR ADMINISTRATION OFFICIAL: Yeah, that’s fine. Yeah, I mean, on the tone, just to repeat what many of us said in the first go-around is – and I think this is – we have many interactions with our Chinese counterparts – the United States and China do – throughout – whether from the State Department or the Treasury Department or other cabinet agencies.

But what’s significant about this is that it is high level – and this maybe gets to the second question – in many different sort of outlets, right? And we’re plugging in on both sides over two days at a high level where we’re going to be able to talk about a broad range of issues. And again, that’s the reason why it’s strategic and economic, is that we want to come together and try to talk about the issues as much – as many issues as we can at a high level, and particularly those issues that are crosscutting, that aren’t sort of owned by one particular agency on either side.

So I mean, clearly, we aim to have a very positive and candid discussion with our Chinese counterparts. But many of the issues we face are difficult. I mean, these are tough problems. Whether it’s on climate and clean energy or some of these regional issues, they’re tough to work through. And that’s why we’re looking forward to having two full days of high-level interaction that can help set a framework and some agendas for the continuous interactions we will have throughout the rest of this year and into next year, until we have our next strategic and economic dialogue, which will then yet be another step forward.

So I think we’re all looking forward to this. A lot of work has gone – on our side, and I know on their side as well – has gone into preparing for this visit and making it as fruitful of an exchange as can be.

SENIOR ADMINISTRATION OFFICIAL: Let me just give you an answer in terms of participation. President Obama has assembled a quite extraordinary team on climate issues, and they will be on display in the – at the meeting. We expect Secretary Chu to be – to participate, science adviser John Holdren, Carol Browner, Lisa Jackson from the EPA, and others as well.

I can’t speak, and obviously for the – in any authoritative way for the Chinese side, but I do anticipate – my understanding that my good friend (inaudible) is going to be coming and participating for the Chinese side, along with a number of senior Chinese officials. So I think it’s going to be a very good group.

And I think – I entirely agree with what [Senior Administration Official] said on tone. These are difficult issues. But I do think, and I’ve said this on many occasions in my interactions with my Chinese colleagues, that climate and clean energy is difficult, but it has the potential to be a really positive anchor in the U.S.-China relationship for many, many years and decades to come, just because it’s something that we’re going to have to work together on, and I think we can.

SENIOR ADMINISTRATION OFFICIAL: Can I just answer the gentleman’s other question?


SENIOR ADMINISTRATION OFFICIAL: Just to be clear, in the U.S. we have what’s called the Committee on Foreign Investment in the U.S., CIFIUS, and Treasury leads this process. And this is to ensure that from a very narrow basis, we protect national security, and that’s nonnegotiable. But we do this in the context of a much broader policy of welcoming foreign investment from around the world, including from China. And we do this because foreign investment creates jobs and growth in America’s towns and cities.

CIFIUS has not been a barrier to investment other than the very limited amount of investment that would threaten our national security. And it’s very important that the Chinese understand that – that we’re open to foreign investment, we’re open to Chinese investment because it’s good for the U.S., it’s good for China.

Frankly, we have some concerns about the development of China’s investment reviews, and they’ve started – they’re just in the initial stages of having their own national security review system. And what we want to talk with them about is how every day, we work to keep our national security reviews focused on a very, very small number of transactions that are related to national security, but as part of a broader policy that brings in a lot of foreign investment and job creation.

SENIOR ADMINISTRATION OFFICIAL: I’m sorry. It just occurred to me, mindful of the rules here of this little briefing, that I should also say that [Senior Administration Official] will also be participating (inaudible). (Laughter.)

MODERATOR: Right There.

QUESTION: Hi. Dan Neumann with Inside U.S. Trade. A question for [Senior Administrator Official] on the Government Procurement Agreement that you talked about earlier: Is the U.S. going to push for a specific timeline for China to make a revised offer? The GPA is meeting at the WTO in October. Is that the kind of timeline that you’re talking about when you’re talking about intensifying efforts? And then also, just in terms of the Chinese hardening their view in certain sectors of in-bound investment into China, could you give some examples of what those sectors are? Is the energy and environmental sector one where you’re seeing these problems?

SENIOR ADMINISTRATION OFFICIAL: Okay. On the first one, you know, when China acceded to the WTO, it made a commitment to join the Government Procurement Agreement. And we think, eight years later, that it’s long overdue. And I think what we want to talk about next week is the experience that we both went through in our respective stimulus programs, where I think in some ways, it showed the value of the WTO, because what came out of the U.S. was consistent with our WTO commitments.

But China is not part of the WTO Government Procurement Agreement, so China wasn’t protected. So that led to an outcry in China about the potential for discrimination, and led to China instituting its own “Buy China” policy, which is a big concern for us. And so we think what we’ve been through in the last 12 months highlights that it’s more important than ever that both sides intensify their efforts to bring China into the Government Procurement Code.

And you’re right, the most important date is this fall – I believe it’s in October – where we certainly hope that China is going to submit a revised offer.

You want to take it?

SENIOR ADMINISTRATION OFFICIAL: Yeah. On the second part of that question, a lot of China’s stimulus program is going into environmentally friendly areas – clean energy technology, high speed passenger rail, cleaning up water supply, for example. And in some of those sectors, the procurement’s pretty open to foreign investment. But in other sectors, China is choosing to close that to foreign goods and services.

And because it hasn’t signed up to this government procurement protocol, there’s no violation of any agreement there. Certainly, it’s within China’s trade rights to do that, but we think that it’s – country is missing an opportunity to get some of the best quality investment in energy areas and in environmental areas. So we think this is a good area for dialogue, talking about opening up the procurement on both sides.

MODERATOR: Okay. Back here in the black dress. That’s you, yeah.

QUESTION: Thanks. Rebecca Christie from Bloomberg. National Economic Council Director Larry Summers has talked about how experts will help lead the U.S. out of its recovery. I’m wondering how that will come across to the Chinese, or how you expect that as you encourage them to rely less on exports for their own recovery.

SENIOR ADMINISTRATION OFFICIAL: Well, I think this meeting is going to take place in an interesting context, where we’re beginning to see some real adjustment in the trade situations on the two sides. Everyone knows there’s been a large trade deficit in the U.S., large trade surplus in China. Over the past year, the U.S. trade deficit has come down by about 50 percent. The adjustment in China was a little bit slower to start, but just between the first quarter and the second quarter, China’s trade surplus declined by 50 percent. And when you dig in to that, what you find is that exports are flat in China over the last few months, but imports have started to grow very rapidly.

Now, there’s obviously a cyclical dimension. China is one of the first economies to start the growth acceleration coming out of the global slowdown. In the United States, the economy has still been slowing, but at a diminished rate over the last couple of months. And so one of the important issues in the dialogue is: What are some of the structural policies that would ensure that this cyclical phenomenon really becomes a permanent change in the trade relationship?

And as we prepare for the dialogue, we think that the – both sides are open to discussing what kind of measures are going to lead to this adjustment. The Chinese have certainly put a very large fiscal stimulus in place, and that’s what’s got their economy growing again, and that’s what’s led to this big surge of imports. And so what – if you just look at what’s been done over the last few months, the Chinese have certainly shown a willingness to implement policies to start bringing about this adjustment. But we don’t want to get too excited about one quarter of data.

QUESTION: Is there an exchange rate policy side to this conversation?

SENIOR ADMINISTRATION OFFICIAL: The exchange rate is certainly one tool that we’ll talk about, but there are a lot of different tools that are going to influence this imbalance – some of the things [Senior Administration Official] mentioned – social policies, financial sector reform. There are a lot of structural measures on both sides that will affect this trade situation.

MODERATOR: Right here in the middle.

QUESTION: Thank you. Thank you. Donghui Yu with China Press. My question is for [Senior Administration Official]. In the previous SED, the U.S. side seems to be dominant on the topics of the dialogue. But (inaudible) U.S. – United States lower its criticism on the currency issue.

Do you think the priority has been changed under the backgrounds of the economic slowdown, and also, the topic would be changed to what China is – concerns about, like dollar’s value and super-sovereignty, reserve currency? And do you think the Obama Administration has a substantial plan to cut the financial deficit – not just the oral promise, but the (inaudible) of cutting the deficit? Thank you.

SENIOR ADMINISTRATION OFFICIAL: Okay. First, I disagree with one thing. I think the previous SED was a discussion between partners on – it was a very balanced discussion. We talked about issues of concern to the U.S., we talked about issues of concern to China. And I’m certain that that tradition of two countries sitting down on the basis of equals, having a very frank discussion about issues of concern to both sides, is going to continue.

The focus has changed because the world has changed. Eighteen months ago, 12 months ago, we didn’t have the focus on repair and recovery from the financial crisis that we’re going to have now, and we’re not going to – we didn’t have the focus on a reform of our financial regulatory system that we’re going to have now. And at least on the economic side, there’s going to be a much bigger focus on our rebalancing agenda.

Both as [Senior Administration Official] and I said, there is a fundamental change in the U.S. economy. Household savings is increasing. And we’re not going to go back to the way we were during 2004 to 2006 or -07, and we need to have a frank discussion with the Chinese, and they need to prepare for a new U.S. economy, a new global economy.

So that’s how things have changed a bit. Part of the rebalancing, as [Senior Administration Official] said, involves a whole array of issues. Certainly, the currency is an important part of a set of policies to move China away from dependence on trade, exports, heavy industry, and more towards domestic demand, consumption, and services.

MODERATOR: Okay. Right here, in front.

QUESTION: Hi. Daniel Ryntjes from Channel News Asia. Wanted to ask you about North Korea; you mentioned that that would be on table. To what extent is that? Obviously, the strategy now is to try to make sanctions right. To what extent are you going to be discussing strategic issues in order to achieve that? For example, you know, even going into military issues to do with maritime security and intercepting ships and that kind of thing.

SENIOR ADMINISTRATION OFFICIAL: The U.S. and China were part of a Security Council consensus a couple weeks ago in which we passed one of the strongest – most strongest-worded Security Council resolutions on North Korea. And we’ve worked together with the Chinese very closely on the implementation of those sanctions.

Secretary Clinton had intensive discussions in Thailand in connection with the ASEAN Regional Forum, with other members of the Six-Party Talks, our other four partners in the Six-Party Talks, not including North Korea. And basically, the approach is to implement the sanctions, and with the Chinese, we’ll be talking about ways of moving forward to reconvene the Six-Party Talks. I don’t want to get into too much detail here, but we’re going to continue the conversation in the context of the strategic track.


MODERATOR: Hold on for the microphone one second for a follow-up.

QUESTION: So it’s just a sense of how much discussion there’s going to be within the S&ED in regards to this issue? That was the kind of tone of what I was trying to get to.

SENIOR ADMINISTRATION OFFICIAL: We’re going to – we’re carving out time in the agenda which we’ll devote to North Korea. And I don’t know exactly how many minutes or hours it’s going to last right now, but we’re going to devote a fair amount of attention to that subject.

MODERATOR: Way back there, right there in the middle there in the blue shirt.

QUESTION: Hi. It’s a question regarding the energy and climate aspect of the talks. What do you expect to get out of next week’s talks? Do you expect there to be any new or concrete additional steps as you move towards Copenhagen? Or is this just more of an effort to talk through some of the issues again as you’ve been doing earlier this year at the G-8 and through the Major Economies Forum?


QUESTION: Oh, sorry. Mike Ball with Argus Media.

SENIOR ADMINISTRATION OFFICIAL: I think that this is going to be a process of continuing to talk through those issues. I don’t think that – we aren’t looking at this as a – well, it’s not a negotiated forum, obviously, and we’re not looking at it as a place where there’s going to be some kind of major breakthrough.

I think that the nature of these conversations, and I’ve been having lots of them now for months at all different levels – bilateral, small groups, multilateral, et cetera – is a continual process of talking about the issues, refining the issues, and trying to see where the gaps are and figuring out whether there is some way to get to common ground on this, that, or the other issue. Obviously, issues of mitigation, finance and technology, these are all things that are critical.

And I think that the – obviously, the clean energy side of this conversation is going to be very important, and the links between that and clean climate are going to be important. But I don’t expect a breakthrough, but I do expect every time I sit down, and in this case now, where it’s not just one-on-one, but there is a full, very broad level of senior participation from both sides, I think it’s an opportunity to advance the ball, push it forward.

And again, a particular aspect of this engagement and the S&ED is that you’re going to have a wide range of senior cabinet people on both sides, hearing conversations that sometimes are only taking place in smaller, one-on-one kind of settings.

MODERATOR: Okay, right here, and this will have to be our last one.

QUESTION: Hi. Nick Juliano with Carbon Control News. Staying on climate for a minute, I was wondering if you have started to hear concerns from the Chinese about some of the border adjustments and other trade-related measures in the House climate bill that the Administration has already taken issue with. And specifically, what’s going to be the message to the Chinese on – you know, what sort of assurances can the U.S. offer in this forum that we’re not going to pursue protectionist climate policies?

SENIOR ADMINISTRATION OFFICIAL: The answer to whether I have heard concerns about provisions in the House bill of that kind, sure, I have from any number of countries. And President Obama has spoken to that issue already.

Look, I think that the – that I obviously can’t give assurances of any kind, since this is a legislation that’s working its way through Congress. The Administration will obviously continue to express its views. Again, the President has done it in a pretty (inaudible) way. But the more – this is certainly true – the more that we can find common ground in a strong approach that involves the major countries on both sides of – the traditional developed and developing country divide – the more that we can get the major countries to be making significant (inaudible) to reduce their emissions, reduction for developed countries is against basically where we are now. It’s based on (inaudible) absolutely (inaudible) reductions for developing countries, and understood to be up against what’s known as a business-as-usual curve, so reducing (inaudible) compared to what they would otherwise do on it – be doing.

As long as we can move forward on that kind of basis, (inaudible) much less (inaudible) – much less concern. They will have concern about those kinds of provisions because those kinds of provisions will be less likely. But again, I can’t make those (inaudible).

MODERATOR: Okay. Again, to remind you, this is Senior Administration Officials. Thank you for coming to the Foreign Press Center. Thank you all for leading. I appreciate it very much.