US treasury secretary tests waters during Beijing visit

US Treasury Secretary Jacob Lew will hold talks with China's new leadership in Beijing on Tuesday and Wednesday, on his first overseas visit since taking office, which analysts say underlines the importance of China to the US in terms of trade ties.

According to the website of China's Ministry of Finance, Lew will meet China's state leaders and hold talks with senior officials.

The visit came three weeks after the new Treasury Secretary's swearing-in and just days after Beijing completed a leadership transition and saw a reshuffle of its cabinet.

Analysts said the time of the visit underscores that Washington attaches great importance to China and the Asia-Pacific region, which it regards as a foothold for its economic and security strategies.

He Weiwen, co-director of the China-US-EU Study Center under the China Association of International Trade, told the Global Times that given the fact that automatic US spending cuts went into effect earlier this month, this trip by the treasury secretary despite his busy schedule displays Obama's new economic team's interest in engaging their Chinese counterparts.

Following the cabinet reshuffle, the Chinese government's economic team saw many newcomers assume office, including the new premier and vice premiers, as well as finance and commerce ministers.

"The Obama administration is eager to learn the new Chinese leadership's policy inclinations on Sino-US economic ties, and reinforce cooperation with the new economic team," He said, adding that the US may want to seize the opportunity to take part in and shape the reform process of China under its new leadership.

Zha Xiaogang, a researcher with the Shanghai Institute for International Studies, told the Global Times that Lew also wants to make sure that China's policies on the value of yuan and trade would not stand in the way of the US economic recovery.

According to the AP, the Treasury said Lew will discuss opportunities for US workers and businesses and leveling the playing field between the world's two biggest economies.

Observers also expected Lew to raise the thorny issue of cyber attacks with Chinese leaders and officials.

The disputes over cyber security have been escalating. Obama last week weighed in and exchanged views with newly-elected Chinese President Xi Jinping on the topic in a telephone conversation.

Though the two sides are expected to hold a frank conversation to learn each other's positions, observers believe the dialogue would be "modest."

"The two sides would prefer to build a friendly relationship from the beginning, and no party wants conflicts at this stage," Zha said. "So they will tone down the disputes in public, though each will stick to its bottom line behind closed doors."

After seeing double-digit growth in the past decade, the Chinese economy is now undergoing structural adjustments, while the US wants to double its exports by 2014.

Zha noted that the two sides have failed to tap their full potentials in achieving a win-win situation due to the US excluding China in a series of economic cooperation efforts.

He said the US doesn't open its market to Chinese enterprises as it does to trade and investment from other countries because it remains vigilant toward Chinese companies.

Last year, China's telecommunications giants Huawei and ZTE Corporation were accused by a US congressional investigation of "posing a security threat to the country," which the pair rejected and said the conclusion was "impeding competition."

In addition to market access in the US, Zha noted that the US-led Trans-Pacific Partnership (TPP), which excludes China, is another example of Washington doing the opposite of promoting bilateral cooperation.

Japan last week announced it is preparing to join in the TPP. "Lew is expected to communicate with China on the issue, and observe Beijing's reactions, so as to make sure it wouldn't become an obstacle for Sino-US economic cooperation in the region," said the expert.

Besides Lew, US Secretary of State John Kerry is scheduled to visit China next month.