Biden: China’s Rise is Good, Cybertheft Must Stop

Vice President Joe Biden said Wednesday that China’s rise is good but its theft of U.S intellectual property must stop, as the global powers began annual talks to build cooperation and hash out deep-seated differences.

The gathering took place a month after the U.S. and Chinese presidents’ summit in California, which tried to set a positive tone in relations but also made clear Washington’s growing anxiety about Chinese cybertheft.

“We both will benefit from an open, secure, reliable internet. Outright cyber-enabling theft that U.S. companies are experiencing now must be viewed as out of bounds and needs to stop,” Biden said in his opening remarks at the State Department.

He cited the “emerging and continuing growth of the Chinese economy” as good news, with Beijing’s rise “good for America and the world.” Yet such progress, Biden said, “comes with some new international responsibilities.”

Heavyweight delegations from the two sides also planned to discuss barriers to U.S. trade and investment in China, the nuclear program of Chinese ally North Korea and other matters, including Iran and Syria’s civil war. Wednesday’s talks focused on climate change and energy security.

Secretary of State John Kerry returned from his wife’s bedside in Boston and issued tearful thanks for the outpouring of good wishes for Teresa Heinz Kerry, hospitalized as she recovers from a seizure-like episode. He intended to return to Massachusetts, with deputy William Burns taking his place at the talks.

The Chinese side was led by Vice Premier Wang Yang and State Councilor Yang Jiechi, who said U.S.-China relations had “reached a new starting point” after the June summit between President Barack Obama and President Xi Jinping.

“China will stay committed to reform and opening up,” Yang Jiechi said, adding that his nation was committed to being a responsible player in the international system.

But he made only passing reference to cybersecurity as one of the “global challenges” that the U.S. and China should work together on.

He said China was ready to discuss human rights with the U.S. and develop military relations that Biden stressed were important for avoiding the risk of confrontation between them in the Pacific.

Beijing has bristled at Washington’s criticism of its suppression of ethnic minorities and political dissent, and has also been reluctant to deepen military ties.

The rivalry between the U.S. and China belies deep economic interdependence between them and a common interest in avoiding armed conflict. The upbeat tone of the Obama and Xi summit went some way to ease mutual suspicion, but it was short on concrete outcomes.

Xi did express common cause with Obama in his opposition to North Korea’s nuclear weapons program, but that has yet to translate into effective pressure on Pyongyang. Biden said the U.S. intends to intensify cooperation with China “to denuclearize North Korea.”

Another U.S. concern, the low value of China’s currency and its impact on the skewed trade balance, has eased as the yuan has appreciated in value against the dollar. But the U.S. is still prodding Beijing to expedite economic reforms.

Biden said China needs to free its exchange rate, shift to a consumption-led economy instead of relying on exports and enforce intellectual property rights. He said the U.S. welcomes China’s growth, but it should be based on international rules.

Treasury Secretary Jacob Lew urged China to “follow through decisively” on its economic reform commitments.

U.S. businesses and lawmakers want an easing of barriers to American trade and investment, a roll-back of subsidies for Chinese state-owned enterprises and progress on negotiations for a bilateral investment treaty.

China objects to security screening of its companies as they look to invest in the U.S.

In Congress, a Senate committee was examining China’s biggest takeover of a U.S. company, a proposed $4.7 billion bid by Shuanghui International for American Smithfield Foods Ltd.

A bipartisan group of 15 senators has asked Lew to consider U.S. food security and food safety issues when the deal has a national security review. That could fuel China’s suspicions that its companies are subject to tougher scrutiny than other foreign investors in America.

There was no mention at the dialogue’s opening of National Security Agency leaker Edward Snowden, whom the U.S. had wanted extradited from the semiautonomous Chinese territory of Hong Kong before he flew to Russia.

U.S. officials have said that China’s failure to cooperate was damaging to its relationship with the U.S., but the case is not expected to overshadow the talks.

Washington has been put on the defensive by Snowden’s claims that the U.S. hacked targets in China, including the nation’s cellphone companies and two universities.