US, China to begin high-level talks

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The United States and China will begin two days of high-level talks Monday on a gamut of political and economic issues, including thorny areas like human rights, foreign exchange and trade.

The world's two biggest economies will tackle areas of tensions in the annual discussions, this year in Washington, but observers expect no major breakthrough.

"This round, we fear, is going to be a tough one," said Carl Weinberg, chief economist at High Frequency Economics.

With both sides still far apart on key economic issues, he said, "prospects for love and happiness to emerge from these talks is very low."

Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner will lead the US team in the third annual US-China Strategic and Economic Dialogue.

They will be meeting with two of the highest-ranking officials in the Chinese government: Vice Premier Wang Qishan and State Councilor Dai Bingguo.

For the first time, top military representatives from both sides will attend.

Senior US officials last week said they would raise concerns with Beijing about its human rights record   and about the undervalued Chinese currency, the yuan.

But high-level Chinese officials, while acknowledging they were willing to discuss both issues, set the stage for two days of contentious talks by outlining the stark differences between the two sides.

On human rights, Chinese Vice Foreign Minister Cui Tiankai told reporters that Beijing was "willing to have an exchange of views with the US and have dialogue with them on the basis of equality and mutual respect."

But he added: "I think it is advisable for the United States to pay more attention to the development of China in terms of human rights, rather than being preoccupied with individual cases".

Geithner will press China again to allow the yuan to appreciate, a politically sensitive issue that has long haunted talks.

The Treasury Department has delayed until after the meeting the publication of its next semi-annual currency manipulation report to Congress, which could lead to sanctions against Beijing.

On the yuan, Vice Finance Minister Zhu Guangyao said the two sides agreed on the direction of reform, but not on the pace of appreciation, with Washington putting too much emphasis on the latter.

US Commerce Secretary Gary Locke, tapped to become ambassador to China, last week said the US government and the private sector had "real frustrations" about Chinese barriers to US investment that would be raised in the talks.

In response, China insisted that foreign companies receive the same treatment as domestic firms.

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