The current global financial crisis has brought into sharp focus the interdependent nature of the relationship between China and the United States.

"The financial crisis has shown that China and the United States are just like two sides of one coin," said Yin Zhongli, a senior researcher with the financial research institution China Academy of Social Sciences (CASS).

"The two are inseparable from each other. China cares as much about the US economy as the Americans themselves," Yin said.

The new China-US Strategic and Economic Dialogue (S&ED) is evidence of those strong ties.

The US Departments of Treasury and State last week announced that the first joint meeting of the S&ED will be held July 27 and July 28 in Washington, DC.

Although schedules have not yet been released, the US Department of Treasury stated in a news release that the first meeting will focus on bilateral, regional and global areas of mutual concern.

US Secretary of State Hillary Clinton and US Treasury Secretary Timothy Geithner will join their respective Chinese S&ED co-chairs, State Councilor Dai Bingguo and Vice Premier Wang Qishan, at the first meeting.

S&ED is an updated version of the Strategic Economic Dialogue (SED) established in September 2006.

The new mechanism was established following the election of the new US president, Barack Obama.

"I am waiting to see the results of the new China-US dialogue, hoping that a new mechanism held by the Chinese government and the new leadership of the US government will create a new atmosphere," Wang Yizhou, a senior researcher at CASS told China Business Weekly.

Topics such as bilateral trade, foreign trade, energy and climate change likely will be discussed at the first S&ED meeting in late July.

But one of the more important topics likely will be the economy, with financial cooperation between the United States and China dominating conversations, analysts said.

"To put it bluntly, the United States must persuade China to buy more Treasury bonds or at least keep its current holdings," Zhao Xijun, a professor at Renmin University, said.

The value of US dollar

"And for China, the government is deeply concerned about its US bond holdings and wants the United States to assume its responsibility for protecting the value of the dollar," Zhao said.

Zhang Lijuan, a professor at Shandong University, agreed with Zhao.

"This is becoming a more sensitive issue and deserves a clear commitment from the United States," Zhang wrote in a recently published article.

Zhang said reform of the International Monetary Fund (IMF) likely will be discussed, as will other questions on restructuring the world financial system.

Trade will be a major topic, too, Zhang said.

"However, it is more likely that trade-related issues will be discussed in greater detail through the high-level Joint Commission on Commerce and Trade (JCCT) later this fall," Zhang said.

"Free trade is no longer a keynote for the Obama administration. The "Buy American" rhetoric in US stimulus bills and "free but fair" trade policy initiatives can be interpreted as a new type of trade protectionism," Zhang said.

Another area of concern, as US Secretary of State Clinton pointed out during her visit to China in February 2009, is climate change.

The S&ED is expected to explore ways to build a stronger clean energy partnership between the two nations.

Zhang said bilateral talks on world politics likely will take place, too.

(China Daily July 20, 2009)