Hopes are high for US, China talks

A wide range of issues is expected to be discussed on the security side, including the Korean Peninsula, Syria, Iran and other regional security issues. China has expressed dissatisfaction over the US attitude over territorial disputes in the South and East China Seas.

One highlight of the S&ED will be talks on energy security and climate change, which Moy described as new features to the dialogue.

A wide range of issues is expected to be discussed on the security side, including the Korean Peninsula, Syria, Iran and other regional security issues. China has expressed dissatisfaction over the US attitude over territorial disputes in the South and East China Seas.

One highlight of the S&ED will be talks on energy security and climate change, which Moy described as new features to the dialogue.

"We want to demonstrate that the two largest economies in the world can cooperate in this century to help tackle this environmental challenge," said Moy.

Sharon Yuan, deputy assistant secretary of the treasury for trade and investment policy, described the S&ED as an important opportunity to bring together senior officials from the two governments to discuss, engage and - more importantly - to make progress on issues of concern to both countries.

The US side has expressed concerns over the role of China's state-owned enterprises, IPR protection, exchange rates and interest rates and upcoming economic reforms that are expected to turn China's economy from an investment-driven model to a consumption-driven one.

The Chinese side has raised concerns over the US government review process overseeing foreign direct investment in the US, the restrictions on high-tech exports to China as well as the quantitative easing policy, which China claims is hurting its economy.

As usual, heavyweights from both sides will attend the S&ED. They will include Federal Reserve Chairman Ben Bernanke, Commerce Secretary Penny Pritzker and US Trade Representative Michael Froman.

Senior Chinese officials will also include Finance Minister Lou Jiwei, central bank governor Zhou Xiaochuan and Commerce Minister Gao Hucheng.

At the end of the talks, the two sides are expected to announce an outcome document that lists the areas of cooperation they have identified.

The 4th S&ED, held in Beijing a year ago, identified some 50 areas. This year, the number of areas is expected to be much higher, according to Chinese officials.