China aims to cut steel glut, avoid race to devalue yuan

The American side also promised to pursue “fiscal sustainability”, a reference to narrowing its yawning budget deficits.

Mr Lew, speaking to students in Beijing, said he hoped to make progress on the excess capacity issue in bilateral meetings with senior Chinese officials starting on Monday in Beijing. Beijing is reportedly considering establishing an Air Defense Identification Zone over portions of the South China Sea, after being angered by USA surveillance flights in the airspace.

China is the world’s number one steel producer, and millions of people are employed in the sector.

Echoing his Chinese counterparts, Lew says ongoing communication is far more effective than confrontation. To prop up its own economy, China is keeping open dozens of industrial plants that pump out raw materials like steel and aluminum, stuff the world already has enough of. President Xi Jinping set such a tone at Monday’s opening ceremony, saying through an interpreter that “the vast Pacific should be a stage for inclusive cooperation, not an arena for competition”. “These policies are vital as China seeks to build on its economic progress in recent decades”. China will grant the United States a quota of 250 billion yuan under the country’s RMB Qualified Foreign Institutional Investor Program. That included a commitment to not engage in “competitive devaluations and not target the exchange rate for competitive purposes”, he said.

“We didn’t agree on everything”, said Kerry.

Still, the top American diplomat stressed the importance of cooperative relations.

“The U.S. China economic relationship is the most important economic relationship in the world”, Lew said.

There was more flow in the consequent working sessions.

China supported tougher United Nations sanctions following North Korea’s fourth nuclear test in January.

Tensions have risen in the region after China’s massive land reclamation on contested reefs prompted the United States to launch military patrols near these artificial islands to challenge what the USA perceives as excessive maritime claims by China.

US Treasury Secretary, Jacob Lew, says the decision will help US firms.

State Councilor Yang Jiechi said Beijing wants to solve disagreements through negotiation.

Chinese negotiators will submit a revised offer delineating which sectors are off limits for foreign investment in the middle of this month, Vice Premier Wang Yang said.

Beijing also reiterated that it will not accept the worldwide court’s ruling over the dispute.

The Philippines, Vietnam, Malaysia, Taiwan and Brunei all have competing claims, and are all close allies of the US. China’s Communist Party Congress, held every five years, is also on the calendar for 2017. “Let’s resolve this through rule of law, through diplomacy”, Kerry said. Groups seen as subverting the state can be banned.

Yang said the law would protect the “legal rights and interests” of nongovernment groups.

The newspaper mentioned constant USA calls on Beijing to speed up economic reforms and give foreign companies access to its domestic market of financials and other services.