Engage China

Engage China supports this high-level engagement between the United States and China through the hosting of meetings, events, and activities for policymakers, regulators, the media, and academic and business leaders to discuss issues relevant to this important bilateral economic relationship.

In 2006, then U.S. President George W. Bush and China President Hu Jintao created the Strategic Economic Dialogue (SED) to provide a framework for ongoing bilateral economic dialogue and future economic and financial relations. The SED was convened semi-annually and led by the Secretary of the Treasury for the U.S., and by a Vice Premier for China.

In 2009, the SED was expanded under the Obama administration to give the U.S. State Department a greater role and was renamed the U.S.-China Strategic and Economic Dialogue (S&ED). 

The now annual S&ED continues as a high-level dialogue for the two countries to discuss a wide range of bilateral, regional and global political, strategic, security and economic issues. U.S. Secretary of State Hillary Clinton and Chinese State Councilor Dai Bingguo currently co-chair the “Strategic Track," while U.S. Secretary of the Treasury Timothy Geithner and Chinese Vice Premier Wang Qishan co-chair the “Economic Track.”

Timeline and Outcome Summary

September 2006

Announcement of the creation of the SED.

December 2006

SED First Meeting (Beijing): The countries made a commitment to pursue macroeconomic policies, such as China's exchange rate regime reform and increasing the U.S. savings rate, to promote balanced and strong growth. The U.S. and China also agreed on the importance of establishing open and competitive markets, based on effective intellectual property rights protection, the rule of law and the dismantling of trade and investment barriers.

Outcomes: Concluding one of the initial bilateral agreements, the U.S. and China have been facilitating financing to support U.S. exports to China, highlighted by a signing ceremony between the U.S. Export-Import Bank, Chinese Export-Import Bank and other Chinese commercial banks.

May 2007

SED Second Meeting (Washington, D.C.):  The U.S. reached new agreements to further open China's markets to U.S. products and services, including further financial sector reform. Specifically, China agreed to remove a block on the entry of new foreign securities firms and resume licensing securities companies, including joint-ventures, and announced that it will allow foreign securities firms to expand their operations in China to include brokerage, proprietary trading and fund management.  China agreed to raise the quota for Qualified Foreign Institutional Investors from $10 billion to $30 billion and agreed to streamline the application and licensing process for the provision of enterprise annuities by financial institutions. 

Outcomes: China has gradually expanded the business scope of qualified joint-venture securities companies to allow them to be engaged in securities brokerages, proprietary trading, and asset management.

China has resumed licensing securities companies, including joint-ventures, in the second half of 2007, ending its moratorium on joint-venture securities firms.

China has allowed foreign incorporated banks, including U.S. banks qualified for RMB retail business, to issue RMB bank cards which meet the operational and technical standards of China’s banking cards, and enjoy the same treatment as Chinese banks.

In order to enhance the development of banks and QDII business, and to provide investors with more opportunities, the CBRC has expanded the scope of qualified investment products to include equities and related structured products.

December 2007

SED Third Meeting (Beijing): Building on the financial sector reforms agreed to at the second SED, China agreed to allow foreign companies doing business in China to issue RMB-denominated stocks and bonds, while also agreeing to complete studies exploring greater foreign equity participation in the banking and securities sectors.  The United States and China also agreed to have rule-making systems that provide for public participation in rule-making, and to continue cooperating on transparency issues.

Outcomes: The CBRC, as promised, completed a scientific study of foreign participation in China’s banking sector. However, the CBRC report concluded that it plans to maintain its cap on foreign ownership of Chinese banks for now.

June 2008

SED Fourth Meeting (Annapolis, MD): The United States reported on steps it is taking to address financial market turmoil and increase financial stability. China reported on continued steps they are taking to open their financial services sector and further integrate into global markets, such as a continued focus on QFII quotas, securities joint-ventures, and further RMB appreciation. The United States and China also made joint commitments to take action to ensure that our economies remain globally competitive, including greater intellectual property protections, greater transparency in the regulatory and rule-making process, and promoting the conclusion of the Doha Round.  

Outcomes: The United States and China have continued their cooperative approach to information sharing on financial services issues of mutual interest, and are working constantly to deepen cooperation to safeguard global financial stability.

China reduced the “lockup period” for the invested principal of QFIIs 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.

The CSRC completed a careful assessment of foreign participation in China’s securities, futures, and fund management firms and its influence on China’s securities markets, and based on the results of its assessment, made policy recommendations on adjusting foreign equity participation in China’s securities markets.

December 2008

SED Fifth Meeting (Beijing): Cooperation to address the existing global financial turmoil and economic slowdown dominated the meeting. To support exports of products and maintain trade flow, both countries agreed to make additional resources available to increase access to affordable trade finance and the supported extending membership in the Financial Stability Forum (FSF) to China and other important emerging market economies.  The United States and China also reached agreement on a number of issues resulting in further opening of China's financial services sector, such as allowing foreign incorporate banks to trade bonds in the Chinese inter-bank market, liberalizing the liquidity standards of foreign banks operating in China, and further appreciation of the RMB. 

Outcomes: China has begun to allow foreign incorporated banks in China to trade bonds in the inter-bank market, both for their customers or their own accounts, on the same basis as Chinese-invested banks.

July 2009

S&ED First Meeting (Washington, DC):  Both countries pledged to maintain their strong policy responses aimed at promoting a strong economic recovery and more balanced global growth, while also committing to foster more resilient, open and market-oriented financial systems, including creating greater opportunities for U.S. financial firms operating in China. 

May 2010

S&ED Second Meeting (Beijing): The two countries reiterated and strengthened their agreements from the first meeting of the S&ED, but also committed to taking steps to improve trade relations, including greater protection for intellectual property rights, ensuring fair government procurement, and decreasing other barriers to foreign investment and trade.   

Outcomes: The CBRC and the FDIC agreed to a statement of cooperation to enhance supervisory cooperation and information sharing on resolution of troubled cross-border banking institutions in each other’s jurisdiction. Such cooperation and information sharing would, among other things, include contingency planning and pre-planning work relating to resolutions.

The U.S. Federal Deposit Insurance Corporation and the People’s Bank of China have strengthened cooperation and information sharing related to stability issues for cross-border banking institutions with financial difficulties.

China has permitted qualified foreign-invested firms duly incorporated in China to carry out stock index futures business in accordance with relevant laws and regulations.