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​U.S.: China aims to cut steel glut

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CBS News MoneyWatch's Jill Wagner has that st... 01:08

BEIJING - China promised Tuesday to rein in steel production flooding global markets and agreed to work with the U.S. in enforcing anti-nuclear sanctions against North Korea, but the two sides ended high level talks reporting no progress on simmering disputes in the South China Sea.

Envoys from the two sides also failed to agree on what to do about China's aluminum sector, one of many bloated industries Washington and other trading partners complain are selling products too cheaply overseas, hurting foreign competitors and threatening jobs.

The two-day annual Strategic & Economic Dialogue, a meeting of Cabinet-level foreign affairs, trade and other officials ended with both sides acknowledging an array of significant issues, including human rights. But they repeatedly stressed their desire for friendly, productive relations between the world's two biggest economies.

China's Premier Li Keqiang, center, holds a meeting with U.S Secretary of State John Kerry , U.S Treasury Secretary Jacob Lew, China's Vice Premier Liu Yandong and Vice Premier Wang Yang, right, at the Great Hall of the People during the end of the 8th round of U.S.-China Strategic and Economic Dialogues in Beijing, China, June 7, 2016. REUTERS/Nicolas Asfouri/Pool

"While efforts over the past several days cannot resolve our concerns, they do represent real progress," said U.S. Treasury Secretary Jacob Lew.

For its part, Washington promised to boost its savings rate and investment, especially in infrastructure. The American side also promised to pursue "fiscal sustainability," a reference to narrowing its yawning budget deficits.

The commitment to persist with reforms to make China's economy more balanced included specific steps for opening its financial sector wider to U.S. companies, Lew told reporters.

For the first time, China agreed to allow U.S. banks to clear transactions denominated in Chinese currency.

Beijing also concurred there is no reason for a sustained weakening of its currency, the yuan, Lew said. That included a commitment to not engage in "competitive devaluations and not target the exchange rate for competitive purposes," he said.

On the strategic side, U.S. Secretary of State John Kerry pointed to scant concrete progress on sensitive issues ranging from maritime security to North Korea. "We didn't agree on everything," the top American diplomat said, stressing the importance of talking through differences.

"The U.S.-China relationship is absolutely vital," said Kerry, who met later Tuesday with Chinese President Xi Jinping. "It may well be the most consequential bilateral relationship of nations in the world."

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In the South China Sea, where China and its neighbors have conflicting claims to territory and possible oil and gas resources, Kerry said he "reiterated America's fundamental support for negotiations and a peaceful resolution based on the rule of law, as well as our concern about any unilateral steps by any party."

The governments reaffirmed their commitment to freedom of navigation and overflight, Kerry said. While the U.S. doesn't take a position in any of China's maritime disputes, Kerry said "the U.S. believes "all of the claimants should exercise restraint."

Chinese State Councilor Yang Jiechi said Beijing wants to solve disagreements over the seas through negotiation. But he said such talks should take place among "the countries involved," and by implication not involve the United States.

"China has every right to uphold its territorial sovereignty," Yang said.

Beijing said over the weekend that it would ignore an upcoming international arbitration decision in a dispute with the Philippines. China also has conflicting claims with Vietnam, Malaysia, Brunei and Taiwan. Further complicating matters are suggestions China could establish an air defense zone over part of the sea, which the U.S. opposes.

On North Korea, Kerry didn't outline any new U.S.-Chinese pressure on the government over its nuclear and missile programs. Instead, he said U.S. and Chinese teams will study how to better implement already approved U.N. sanctions on Pyongyang.

Kerry also raised the matter of human rights, in particular China's crackdown on lawyers and freedom of religion. He expressed concern about a new law on nongovernmental organizations, urging China to let NGOs function across the country. The law puts foreign advocacy groups under direct police supervision, forcing them to state the sources of their funding and explain how budgets are spent. Groups seen as subverting the state can be banned.

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