China-US dialogue to address economic issues

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The first round of the China-U.S. Economic and Strategic Dialogue will be looking at a range of topics.

China and the US are preparing to meet next week. And there is no shortage of topics for discussion between the world's biggest developing country and the biggest developed one. US President Barack Obama has already made China a high priority. He met with Chinese President Hu Jintao at the G20 meeting in London. And he has sent many high-ranking US officials to China.

Kenneth Lieberthal, The Brookings Institution said "They think that the US at some point is going to try to do something to stop China's rise, because we fear another country that is as powerful as China might become. We fear that a powerful China will try to marginalize the US and Asia, but Asia is vital to America's economic and security interests."

These trips may have done much to foster better ties between the two. But some say that the upcoming talks are not likely to do much to advance the relationship.

Derek Scissors, The Heritage Foundation said "It's always nice to have senior officials, specially in countries that have a great deal of conflicting interests, talk to each other on a regular basis. I think that's pretty much all the talks are going to accomplish."

US officials have confirmed that they will discuss the involvement of US companies in China's fiscal stimulus plan. Talks could also include China's signing of the WTO Agreement on Government Procurement. China is insisting that Washington lower its pricing threshold required for the accord. US officials say they also hope to touch on bilateral investment.

But the number one priority for China is likely to be the security of its massive investments in US-dollar denominated assets. China is the largest creditor of the US. And, in May, its total holding of US debt exceeded 800 billion US dollars.