Clinton and Co leave China with little to declare

The US sent no less a light than Hillary Clinton, the secretary of state who grabs almost as much attention as Barack Obama, the US president, to co-chair the annual US-China strategic and economic dialogue in Beijing this week. During her time in the Chinese capital Mrs Clinton may have been preoccupied with relations between North and South Korea, and efforts to encourage China to support a fourth round of sanctions against Iran, but the American delegation was still paying plenty of attention to economic disputes with their hosts.

Timothy Geithner, the US Treasury secretary and another co-chair of the talks, and as many as 200 supporting officials, were looking for Beijing to make concessions over issues including the value of the yuan and the preference in government procurement for Chinese products, or "indigenous innovation" as it is called. But what have the Americans come away with from their visit? Perhaps unsurprisingly, not very much it seems, at least in terms of firm commitments.

Yes, there were plenty of memoranda of understanding and a total of eight agreements reached, while the Chinese press lauded the talks as a success and Mrs Clinton bravely insisted they had yielded "concrete results". However, it is difficult to see what these results are, and harder still to believe that those in the US calling for punitive measures against Chinese imports in retaliation for China's currency policies will be satisfied.

On the yuan, the Chinese president Hu Jintao said as the conference opened that China would "steadily push forward reform of the exchange-rate formation mechanism". Mr Geithner, in his closing comments, may have welcomed China's commitment to reform its exchange rate mechanism as it looks to increase domestic consumption, but China's statements are not even close to the timetable for appreciation that some Americans would like to see.

The US has long been calling for China to let the yuan appreciate, with politicians and manufacturers insisting that what some say is a 40 per cent undervaluing of the currency is costing jobs. Europe is similarly concerned over the issue of whether manufacturers in the West are able to compete fairly with their Chinese counterparts. The frenzy of speculation early last month that revaluation was imminent has now died down, but some believe a revaluation could come before next month's meeting of leaders of the Group of 20 developed and emerging economies. However, this week's dialogue does not appear to have made the prospect more likely.

On the question of indigenous innovation, which has seen China offer preference for local technology when deciding on government procurement contracts, Beijing has said that by July it will release new draft proposals on government procurement that would allow the authorities to make purchases even though there was up to 50 per cent of foreign content. Tied to these amendments is a commitment to adhere to an internationally agreed set of standards on such procurement by signing up to the World Trade Organisation's government procurement agreement. China is not quite offering the "level playing field" that Mr Geithner has called for, but the US trade representative Ron Kirk said progress in opening up China's markets to foreign companies could be more important than seeing the yuan appreciate.

China's official Xinhua news agency hailed this week's talks as having led to "consensus" on everything from aiding the global economic recovery to anti-protectionism and financial reforms. Likewise, the US-China Business Council hailed the talks as a success, saying it never expected an announcement on the yuan and that the dialogue was "a vital part of the ongoing process of resolving issues". But on the biggest economic stumbling block that divides them, the value of the Chinese currency, there is little sign that Beijing and Washington have moved much closer to finding common ground. China has shown once again its determination to set its own agenda, so wrangles over the currency, as well as protectionism, are likely to remain in the spotlight for months to come.