Energy Trade and Investment Could Benefit from the Strategic and Economic Dialogue

The latest meeting of the US –China Strategic and Economic Dialogue (S&ED) was held May 9 and 10 in Washington, DC and the two outcomes papers are out: The Strategic Track, which is essentially political, but also covers climate and energy, and the Economic Track, which is led by Treasury, but covers a number of trade and investment issues of interest to the energy industry.

From an energy point of view, probably the most important discussions took place in the Economic Track, where there is important language on eliminating “indigenous innovation” preferences (i.e. for Chinese-designed goods) from Chinese government procurement, some additional efforts at intellectual property protection, and language promising greater transparency in both trade and investment. To answer a Chinese concern there is also a U.S. promise to consult on U.S. reform of the export control system, which the Chinese often suggest has blocked their access to some clean energy technologies.

In the Strategic Track, the two sides committed to continuing to work together toward a “positive outcome” of the UN climate negotiations in Durban, South Africa at the end of this year, and mentioned progress in a wide variety of energy collaborations. One interesting development was a National Oceanic and Atmospheric Administration Announcement of enhanced collaboration with the Chinese Meteorological Administration in greenhouse gas monitoring.

The fairly anodyne language on energy cooperation in the outcomes document perhaps masks the strength of the actual bilateral. The Clean Energy Research Center has now linked researchers and companies on specific projects in clean coal, green buildings and low-carbon vehicles. Similarly, speaking with David Kline, a ChinaFAQs Network member from the National Renewable Energy Laboratory today, the US and China have a parallel cooperative agreement on renewables that has active projects on everything from trying to help the Chinese maximize the amount of wind power they deliver effectively to the grid to learning from Chinese advances in biofuel research. All of these projects bring together researchers and businesses in both countries.

image caption: U.S. Secretary of State Hillary Rodham Clinton, second from right, and U.S. Secretary of the Treasury Timothy Geithner, far right, along with Chinese Premier Wang and Chinese State Councilor Dai deliver joint closing remarks, in the U.S. Department of the Interior’s Sidney R. Yates Auditorium in Washington, D.C., on May 10, 2011. Original image is a U.S. government work