William J. Burns
Deputy Secretary of State
Secretary of Treasury Jacob Lew
U.S. Department of Treasury, Cash Room
Washington, DC
July 11, 2013

The video is available with closed captioning on YouTube

MODERATOR: Everyone, thanks so much. We’re going to start with just a few questions. Let’s see. Esther, CCTV.

QUESTION: Thank you, (inaudible) of China (inaudible) TV, and I’d like to raise a question to Secretary Lew: Now both China and the United States are going through some economic changes. China’s making structural reform, and the United States is trying to revitalize its manufacture to increase jobs.

So under these unique circumstance, how do you think China and the United States can be more mutually complementary in economic cooperation? And a follow-up question on that --

SECRETARY LEW: I can’t – I’m sorry. I can’t hear.

QUESTION: (Off-mike.)

SECRETARY LEW: No, I could hear right until the end.

QUESTION: Okay. And a follow-up question on that is that what specific measures will the U.S. side take to further loosen its restrictions on exports of high-tech goods for civil use in China? Thank you.

SECRETARY LEW: I think the U.S. economy is in such a different place now than it was just four years ago. We’re growing and we’re – we have prospects for continued growth and we would like the growth to be faster, but I think that this set of meetings, as many of the meetings that I’ve had in recent months have had this character to them, that there’s a renewed recognition and respect for the resilience of the American economy. And with all of its problems, the resilience of the American political system, because we responded in a decisive way to the economic crisis and our economy is back.

Now I think that the lessons from this are that change is hard and you have to make changes to get your economy where it needs to be. And you don’t get there all at once. So we’d like to be growing more and we’d like unemployment to come down more. One of the messages that we had in these meetings, and that we heard back from the Chinese, was that they’re committed to change, that it’s a long process, that they need – they know they need more market-oriented features to their economy, and we need to open markets to each other. We welcome Chinese investment in the United States; we welcome the opportunity to have U.S. investment in China. And the agreements that we reached at these meetings reflect the importance of open markets.

The decision made by China to enter into the negotiations over a BIT, an investment treaty, with the kind of features that they’re willing to accept, shows commitment to opening markets, which is so important to our exporters.

I think one of the reasons that these discussions were so significant is that we are pushing hard for China to do things that China needs to do for itself. And it shows that there is an overlap of interest, that as China moves towards more openness in its exchange rates and its interest rates and its economic system, it’s going to mean more growth in China and more opportunity for U.S. exports to China. It’s a win-win. And we are, I think, in a place now where, as the two largest economies in the world, we have to have these kinds of conversations because the world economy needs for us to be working in that kind of cooperation.

MODERATOR: (Inaudible) Anna Yukhananov from Reuters. Anna.

QUESTION: Hi, this is Anna Yukhananov from Reuters. Thanks for taking my question. I was wondering if you could just elaborate a little bit more about the auditing agreements and whether you think this resolves some of the longstanding SEC issues, having this sharing of auditor documents.

And second, if you could just give some more specifics about exchange rates – you said you see signs of progress – if there’s anything specific that China promised to do. Thank you very much.

SECRETARY LEW: The exchange of audit information has been a very significant issue that our market regulators have needed access to the kind of information that was not forthcoming. And we’d had long discussions about the provision of that information. So the decision to make the information available permits our market regulators to do their job. Ultimately, if we’re going to have the kind of relations between the United States and China that permit easy access to each other’s markets, it requires a kind of transparency so that there can be confidence that the rules of the road are being followed and that a level playing field is really available to all. So I think it is important. It’s a rather technical issue, but it’s an important step in the road.

And on exchange rates, we had extensive discussions, as we have on each of the occasions when I’ve engaged with our Chinese counterparts, and we have acknowledged that there has been progress in closing the gap, but we’ve also made it clear that there’s still more progress that needs to be made in order to reach the point where there’s truly a market-determined interest rate.

I think we’ve made progress. We still have some more work to do.

MODERATOR: The next will be from Matt Pennington of AP.

QUESTION: Secretary Burns, can I ask you about North Korea? The State Councilor mentioned that China was committed to creating the conditions for the earlier resumption of the Six-Party Talks. Do you agree upon what those conditions are? Does China share the view of the U.S. that North Korea has to take concrete steps to show its commitment to denuclearization before talks can restart? Or does China think that talks should start now without precondition?

DEPUTY SECRETARY BURNS: I think, obviously, our Chinese colleagues can speak for themselves on this. But what I would say is the following: First, the issue of North Korea was a very high priority throughout the course of the last two days of discussions, and I think there was a strong reaffirmation from both sides of our commitment to verifiable denuclearization and to meaningful steps on the part of the DPRK to demonstrate its seriousness, because I think neither the United States nor China are interested in talks simply for the sake of talks.

And so I think, much as was the case when our two presidents met in California, much as was the case when Secretary Kerry traveled to Beijing in April, I think there’s a very strong consensus between us on the significance of this issue, on the importance of the United States and China working together to ensure that the DPRK lives up to its obligations and translates rhetoric and prior commitments into reality, into the kind of meaningful steps that I think both of us understand are essential to make real diplomatic progress.

MODERATOR: The final question will be from Bingru Wang from Phoenix TV.

QUESTION: Thank you, Jen. Hi, Secretary Burns and Secretary Lew. I have two broad questions. The first one is: Before the S&ED, a State Department official said they want to ask China to define the new type major country relationship. Now, after the S&ED, what’s your understanding of it? And are you ready to answer China’s call?

Secondly, yesterday, at a background briefing, one official described Wang Yang – he found him very – found him – had a good sense of humor. So I wonder what’s your impression of your counterparts? Do they give you strong confidence to strengthen the trust? Thank you.

SECRETARY LEW: I would say, starting with my visit to Beijing in March and the conversations we’ve had since Secretary Kerry’s visit just a few weeks later, we have felt a change in the new leadership in China. I think it was reflected when the two presidents met at Sunnylands in a very public way. It’s a new generation. There’s an openness, a desire to engage in a personal way and establish relationships, looking ahead to working with our Administration for the next four years, and for them, looking at working with the United States for 10 years. Making progress today is important, but building the kind of trust that can be the foundation for making more progress in the future is a very important part of it.

From the meetings in March through the meetings today, there’s a willingness to put the notes aside and talk directly and to deal with the difficult subjects. We dealt with some very difficult subjects and we don’t agree on everything, but to do it in a forthright way, in a direct way, and it’s – that’s the way one can build a relationship of trust. So I have a very positive reaction myself to the personal approach of the new leadership, and I think the Vice Minister brought that spirit to the team that he brought with him.

DEPUTY SECRETARY BURNS: Sorry, and I would just add that I agree very much with Jack about the overall tone of the S&ED conversations. I think it reflects the maturity of the relationship that we can not only focus on places where we can build on areas of common ground but also on areas of obvious difference, and deal with it in a candid and honest way.

I think on the personal side, Secretary Kerry has known State Councilor Yang for more than a decade, dating back to the State Councilor’s time as ambassador in Washington. They have, I think, a very easy and effective personal relationship, a lot of professional respect between the two of them, and I think that contributes enormously to the kinds of dialogue that we just had over the last couple of days.

MODERATOR: Thank you so much, everyone.

SECRETARY LEW: Thank you very much.

PRN: 2013/0879

[This is a mobile copy of Remarks at Press Availability]

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