By John Pomfret
Wednesday, May 26, 2010; A09
BEIJING -- Secretary of State Hillary Rodham Clinton and Treasury Secretary Timothy F. Geithner wrapped up extensive talks with Chinese officials Tuesday without any significant progress on Iran, North Korea or other key issues dividing the countries.
At the second annual Strategic and Economic Dialogue, Chinese and American officials signed seven memorandums of understanding on issues such as shale gas development in China and supply-chain security. But on the bigger issues, China did not budge.
Despite what Clinton termed "productive and detailed discussions" about the crisis on the Korean Peninsula, for example, China has declined to accept the results of a South Korean report that implicates North Korea in the deadly sinking of a South Korean warship March 26.
Asked Tuesday whether she had succeeded in pushing China to change its views, Clinton replied: "We had very productive and detailed discussions about North Korea. The Chinese understand the gravity of the situation."
China has increasingly shown its assertiveness on issues in Asia. That stance, along with the increasing tension between the Koreas, could benefit the U.S. strategic position across the region, analysts say, as countries such as Japan and South Korea draw closer to Washington as a hedge against China's newfound strength.
Even former U.S. enemies such as Vietnam and nonaligned states such as Malaysia, which for years had adopted a lukewarm view of the United States, have moved closer -- in part because of China's rise.
At the talks here, Clinton and Geithner were accompanied by a group of about 200 U.S. officials, including four Cabinet secretaries; Federal Reserve Chairman Ben S. Bernanke; Adm. Robert F. Willard, commander of U.S. forces in the Pacific; and experts on subjects including energy and education. Clinton called it the biggest U.S. delegation to ever come to China.
Before the talks started, U.S. officials played down the possibility of major breakthroughs -- they spoke of their hope for "solid singles, not home runs." But even by those standards, the results of the two days of talks seemed thin.
On efforts to rein in Iran's alleged nuclear weapons program, Washington and Beijing apparently made no progress in dealing with a disagreement over which companies would be hit with sanctions under a planned United Nations Security Council resolution. And when asked about whether China would allow the value of its currency, the yuan, to appreciate against the dollar, a central goal of the Obama administration, Geithner pivoted and praised China for its growth rate.
The talks in Beijing occurred against a backdrop in Asia in which recent Chinese missteps and trouble between the Koreas appear to be benefiting the United States, halting what many in the region had viewed as a strategic slide in American influence.
China reacted slowly to the sinking of the Cheonan, the South Korean warship, waiting almost a month before offering South Korea condolences. Then, without telling South Korea of its plans, it feted North Korean leader Kim Jong Il in early May, apparently offering him another large package of aid. China's attitude enraged South Korean officials.
But more important, according to Michael Green, a former National Security Council official who was in the region as the crisis unfolded, China's attitude toward the attack served to underscore how differently China views the Korean Peninsula than those in South Korea or Japan. For China, keeping the Koreas separate is a foundation of its policy, he said, whereas for South Korea and even for many in Japan, a united, democratic Korea is the goal.
"It is a defining moment," he said.
Chinese missteps with Japan and the crisis between the Koreas have also helped to push the Japanese government, which had been considering a foreign policy more independent from the United States, firmly back into the American orbit.
On Sunday, Prime Minister Yukio Hatoyama, who leads only the second opposition party to run Japan in nearly 50 years, announced he would accept a plan to relocate a U.S. Marine Corps base on Okinawa despite a campaign promise that the base should be moved out of Japan. A day later, Hatoyama said a key reason was the Korean trouble. But Chinese aggressiveness also played a role, Japanese officials said.
In April, Chinese military helicopters twice buzzed Japanese defense ships that were monitoring Chinese naval exercises. And on May 15, during negotiations between Japan, South Korea and China, China's foreign minister, Yang Jiechi, erupted at his Japanese counterpart, Katsuya Okada, after Okada suggested that China cut its nuclear arsenal. Yang almost left the talks in the South Korean city of Gyeongju, according to diplomatic sources, and screamed at Okada that his relatives had been killed by Japanese forces in northeastern China during Japan's occupation of China during World War II.
Okada was shocked, a Japanese official said.
"He's always been a peace lover," the official said. "I guess the Chinese felt like yelling."