The statement also said the United States acknowledges China's recently announced plans to close 100 to 150 million metric tons of steel capacity, and to strictly prohibit the expansion of crude steelmaking capacity over the next five years.
Thomas J. Gibson, president and CEO of the American Iron and Steel Institute, said on Tuesday in a statement that his institute welcomed "the new commitments by Chinese leaders to adopt measures to strictly contain steel capacity expansion, reduce net steel capacity, eliminate outdated steel capacity, and dispose of 'zombie enterprises' through restructuring, bankruptcy and liquidation, as appropriate."
"China's participation in further efforts to address global excess capacity at the OECD Steel Committee is also positive," Gibson said.
Frisbie, the USCBC president, called on the United States to use "internationally-accepted, legally-sound" trade tools to address distortions in the U.S. market caused by overcapacity problems.
The China-U.S. annual strategic dialogue comes at a time when steel overcapacity has become an acute global challenge and U.S. steel producers are increasingly resorting to trade remedies and tariff protection to ride out a sluggish steel market, a practice strongly opposed by Chinese steel producers and exporters.
Kirkegaard said he was convinced that this round of strategic dialogue "will help prevent a much more damaging confrontation later this year over steel and help channel the issue into a multilateral OECD-led process."
RMB TRADING & CLEARING IN U.S.
China has set up offshore RMB trading hubs in Hong Kong, London and Toronto, but the U.S. market remains untapped.
China will grant the United States a quota of 250 billion yuan (38 billion U.S. dollars) under the country's Renminbi Qualified Foreign Institutional Investor program and appointed one Chinese and one U.S. bank to conduct RMB clearing business in the United States, according to the statement.
"It's very encouraging that both sides have endorsed a framework for facilitating RMB trading and clearing in the U.S. for the first time," said Michael R. Bloomberg, chair of the Working Group on U.S. RMB Trading and Clearing and founder of Bloomberg L.P.
"This will help bring new momentum to the working group's efforts to expand trade between the United States and China by allowing the RMB to be cleared in the U.S.," he added.
S&ED MECHANISM
U.S. experts said the S&ED has become an important venue for promoting cooperation and managing differences between the world's two largest economies, but this mechanism needs improvement to become more effective in the future.
"As we approach the close of the Obama administration, it is important to remember that the S&ED was established in recognition of the need to expand engagement to address the array of issues in the U.S.-China relationship," Frisbie said.
"In the next administration, the mechanisms for dialogue can be tweaked to make further improvements and become more effective, but high-level engagement is now mandatory in the U.S.-China relationship," he added.
Kirkegaard said the S&ED is very much part of the overall process to manage the U.S.-China relations.
"The S&ED is part of the process to 'avoid doing stupid things' and keep small problems from growing into something bigger -- as such, its real value is largely preemptive as well as latent in the sense that if an important issue suddenly needs to be dealt with in U.S.-China relations, in the S&ED the two governments have a channel available," he said.
"This S&ED will surely have been instrumental in paving the ground for any big announcements made when President Xi and President Obama meet later in the year and also for helping avoid large confrontation over 'manageable issues' like steel," he said.
