Secretary Hillary Clinton delivered this statement in Washington, DC

Secretary Clinton. On behalf of President Obama and the people of the United States, I send our sincere condolences and sympathy to the people of Thailand for the loss of life and damage caused by the flooding in southern Thailand. I am grateful to the Royal Thai Government and the Royal Thai Navy for their ongoing assistance to American citizens in the area during this difficult time. The U.S. Embassy in Bangkok has offered immediate disaster relief assistance, and we are working closely with the Royal Thai Government to provide additional help if needed.

Our thoughts and prayers are with the Kingdom of Thailand—our longtime friend and ally—and everyone affected by this terrible tragedy.

Secretary Hillary Clinton and Foreign Minister Kim Sung-hwan delivered these remarks in Seoul, South Korea

Minister Kim. Well, Madam Secretary, welcome to my country, and it is my great honor to have you at my humble residence. And actually, your visit to my country this time will certainly be more refreshing because—for the ratification of the Koreas FTA. I look forward to working closely with you to get the ratification from both of our legislatures.

And taking this opportunity, I would like to express our sincere appreciation for your support and close coordination in dealing with the North Korean issue, and your support for our inter-Korean dialogue first was the underlying force for progress of South-North dialogue. And I also look forward to working closely with you in resolving North Korean nuclear issues.

So short as your visit may be, I hope you will have a memorable and a meaningful stay here in Korea. Thank you.

Secretary Clinton. Well, Minister Kim, let me thank you for your gracious hospitality on a Saturday night. But I must say it is a special treat for me to be here in your residence and also on a beautiful day in Seoul. The sun was shining. I cannot take credit for that, but if there's any credit to be extended, I won't reject it.

I agree completely with you. We have worked so closely together and I am very encouraged and determined about the passage of the Free Trade Agreement. We will be consulting and making the case together to our respective legislatures, and I'm very confident that there will be a positive outcome that will benefit both of our countries.

I also appreciate this opportunity to consult on global issues. We have worked closely together and will continue to do so on nonproliferation. We are looking forward to the Nuclear Security Summit next year that you will be hosting, and we're very grateful for that. We are working closely together on development issues, and of course, you were the first to respond in the terrible wake of disasters that struck Japan. And I look forward to hearing your views on that as well.

There is much to be worked on together. Our partnership, our friendship our alliance, I think after two years of effort under this Administration, is stronger than ever. But it is important that we're meeting in the home stretch of the Korean Free Trade Agreement and that's going to be a singular accomplishment of both of our presidents and will contribute so much to broadening and deepening our relationship going forward.

Secretary Hillary Clinton delivered this statement in Seoul, South Korea

Secretary Clinton. Thank you. Thank you very much, and good morning. It is a beautiful day in Seoul, and I am delighted to see all of you here this morning. Thank you for coming out on an early Sunday morning. I want to thank Ambassador Stephens, who has done such a wonderful job on behalf of the United States here, as our ambassador; Assistant Secretary Kurt Campbell, who is responsible for the East Asia-Pacific region, which is quite a large part of the world. I want to also recognize Frank Little, your chairman, and Amy Jackson, your president.

I wanted to come by to express our strong commitment to ratifying, through our Congress, the Korean free trade agreement by the end of this year. That is our goal. That is our commitment. And we need your help in order to achieve it. We are very committed to expanding jobs in the United States and in our trading partners. We think that what is happening here is vital to America's economic renewal. East Asia is home to 4 of our 10 largest trading partners. And the Asia Pacific, as all of you know so well, represents, by far, our fastest-growing export market.

I have championed American jobs and American businesses as Secretary of State. I have been very honored and privileged to speak out on behalf of Americans who are doing business around the world. And I have championed American economic engagement in Asia, advocating for our workers and our businesses, looking for a level economic playing field on which to compete. And that is why I, along with the rest of the Obama Administration, have made it a diplomatic priority to advance the rules and principles of open, free, transparent, fair competition for everyone.

As you probably know, President Obama announced the national export initiative last year to double American exports. And we know that one of the ways you do that is by opening up trade. We are also working to strengthen Asia's regional economic architecture. We will be hosting the 2011 APEC summit in Hawaii later this year. We are pushing to advance economic integration, remove trade barriers, and make sure that our national regulations line up in a way that encourages trade. We are also working hard on the trans-Pacific partnership, a cutting edge regional free trade agreement that would eventually cover an area responsible for over 40 percent of global trade.

Now, across Asia—in fact, across the world—we are looking for opportunities to open more markets and unleash the talents of people everywhere to improve their own lives and the lives of their families and societies, and to drive economic growth in a way that provides prosperity broadly to as many people as possible.

Now, the U.S. and Korea already have one of the most vibrant trading relationships in the world, one that accounted for nearly $88 billion last year. Korea is our seventh largest trading partner, and the United States is South Korea's third largest trading partner. Our $38.8 billion in exports to Korea already support approximately 230,000 American jobs, a point that I make often with our friends back home.

But the truth is we know we can do more and create more jobs if we can lower the barriers to trade between our countries. I know that many of you in this audience, American and Korean alike, have long been supporters of KORUS, because you know it will deliver significant benefits. The tariff cuts alone will increase exports of American goods by $11 billion, supporting tens of thousands of American jobs. And the South Korean ministry of knowledge economy estimates that within a decade KORUS alone will grow South Korea's economy by six percent. KORUS also contains very strong protections on labor standards, the environment, intellectual property rights, and regulatory due process. We believe all of those are essential to creating a level playing field and making sure that trade actually delivers for people.

Now, of course the benefits of KORUS go far beyond the economic bottom line. Ratifying KORUS is profoundly in our strategic interest, as well. We have such a deep and broad relationship between our two countries. We are allies, partners, and friends. And, of course, I am well aware of how important it is that we constantly make sure that our relationship is as strong as it possibly can be. I am happy to report that I think it is at the strongest point that one can look back in history and account for.

So, getting this done on behalf of KORUS is another powerful message that we are working together, of course, for our own countries, but also in a strategic relationship that is beneficial to the region and the world. I know how Korea has become, in many ways, a global power: hosting the G20, hosting the nuclear security summit next year, really stepping out very impressively on the world stage in so many areas. And we want to be your partner. And we believe that this agreement is one of the most tangible benefits of and evidence of that strong partnership.

I am pleased to report that KORUS is currently ready for review by the United States Congress. This is a high, if not a top—I think it is probably one of my top priorities for the next months. We are determined to get it done, and I believe we will. We will need your help. It will be important to keep making the case to both of our respective legislative bodies.

When one looks at South Korea's rise within my own lifetime from a poor nation, devastated by war and having lived through so many decades of difficulties and troubles to being one of the most dynamic societies and economies anywhere in the world, it is a very impressive story. I am optimistic that we are on the cusp of a new era of even greater global leadership and closer ties between our two nations. We are well positioned to continue rising together, delivering peace, prosperity, and progress to the Korean and American people. And I greatly appreciate the opportunity to work on behalf of this very important goal.

So, thank you for everything you have done. I know that this particular body has been instrumental in making the case. So don't flag now; we need your last-minute push. You cannot talk—at least speaking for my own congress, having been a member of the Senate for eight years—you cannot talk often enough to make the case. And I hope that you will not flag in our efforts to be sure that we see the realization of this very important goal this year.

Thank you all very much.

Secretary Hillary Clinton and Foreign Minister Takeaki Matsumoto delivered these remarks in Tokyo, Japan

Minister Matsumoto. Once again, I would like to say how grateful I am to Secretary Clinton for her visit to Japan.

The U.S. made a proposal for a post-disaster reconstruction, including the private sector, Japan, and U.S. move ahead with the partnership. We had an agreement on this. And (inaudible) ownership, Japan will formulate its reconstruction plan. And, based upon the plan, the—we would like to have cooperation from the U.S. and other countries in the world, so that we can proceed rapidly in the direction of reconstruction. In the process of reconstruction, we would like to welcome support, advice, and (inaudible) from the U.S. side. We have with us President Donohue of U.S. Chamber (inaudible) the Japanese (inaudible), along with Secretary Clinton. The two top people of the business communities had an opportunity to have a conversation with us. We welcome (inaudible) and that the government would like to certainly (inaudible) their efforts.

And as for the public-private partnership, we would like to consult with each other, and we would like to start with whatever we can deal with immediately. And President Donohue said Japan and the United States have a very unique relationship in the economic field. And to show that we have a very robust economy, it is very important for not just Japan, but for the rest of the world, as well. We—I welcome the effort, and I have been greatly encouraged by his word.

And going forward, as we move ahead with the reconstruction, we have just announced this—Japan's partnership. And just the other day the U.S. side also said that it would relax the restrictions on travel to Japan. And these are very positive steps, and I believe these are steps that would promote the reconstruction of Japan.

Secretary Clinton said that a friend is someone who really helps a friend in adversity. She gave us very warm, cordial words.

In the rescue and relief operations we had a lot of cooperation with each other, and many Japanese people and the heart of the Japanese people and the heart of the American citizens, I think, are met in this process. And so, as we deepen our cooperative relationship between the government and also the citizens, and as we see a very strong, robust growth in the business arena as well, I think I am convinced that we will be able to achieve reconstruction. And with this determination, I would like to conclude my message to you. Thank you. Thank you very much. I would like to invite Secretary Clinton to say a few words, please.

Secretary Clinton. Thank you very much. Good afternoon. I am honored to be back in Japan. I wish to convey in person to the Japanese people my country's admiration for your strength in the face of this multi-dimensional crisis of unprecedented scope. We pledge once again our steadfast support for you and for your future recovery. We are very confident that Japan will demonstrate the resilience that we have seen during this crisis in the months ahead as you resume the very strong position that you hold in the world today.

I am very pleased to have had the opportunity to meet again with the foreign minister. As he said, we have been in touch by telephone and had an opportunity to meet in Paris shortly after he took office, and shortly after the earthquake and tsunami hit.

President Obama has reached out to Japan on behalf of our country. We both were very touched by our visits to the embassy in Washington to leave a personal note for the Japanese people in the condolence book there. And officials across both of our governments have been in constant contact to coordinate our relief efforts. The alliance between Japan and the United States is the cornerstone of peace, progress, and prosperity in East Asia. For 50 years, it has been sustained not only by the actions of our governments, but by the allegiance of our people. This alliance lives in our hearts.

And so, when we in the United States saw Japan struck by such a catastrophe, and realized the magnitude of what you were facing, we responded not simply as allies and partners, but in a deeper sense, as friends. The people of the United States could not stand by as the people of Japan suffered. At the U.S. embassy and at our consulates in Japan, our diplomats and disaster experts, have worked around the clock with their partners in your government and in the self-defense forces. Many U.S. officers stationed in other countries who once lived here in Japan volunteered to come back from as far away as Nigeria and Canada, because this country means a great deal to many Americans. And they wanted to be here to help. This is what friends do in times of need.

We were fortunate to have dedicated leaders in our governments and in both of our embassies. Ambassador Roos led our efforts here in Japan, and Ambassador Fujisaki led Japan's efforts in America. I want to thank both of them.

Our nuclear experts from the Nuclear Regulatory Commission and the Department of Energy have supported the heroic Japanese responders working to end the emergency at Fukushima. And the U.S. military has provided many forms of assistance as part of Operation Tomodachi—in English that means “Operation Friend”. To cite just one example that the minister and I were discussing, Sendai Airport was engulfed by the tsunami. Its buildings were uprooted, its runways covered with tons of debris. For the past month, U.S. airmen, soldiers, and Marines have worked with their Japanese partners to clear away the devastation and to repair the landing strips. This week, earlier than anyone had predicted, Sendai Airport reopened to commercial flights.

Examples such as this of collaboration illustrate a broader point. When the earthquake and tsunami occurred, the response of the United States was all hands on deck. That sentiment still continues, and will continue, because the well-being of the Japanese people is a bedrock priority of the United States. You are our partners and our friends.

So our two governments, as the minister said, have agreed to create a public-private partnership for reconstruction. We wish to enhance cooperation between Japan and American businesses, between civil society groups, public officials, under the guidance of the Government of Japan, with its planning.

Here with me today are Tom Donohue, a leader in the American business community, and president of the United States Chamber of Commerce, and Tom Nides, my deputy secretary of state, who had a distinguished career in business before joining the State Department. I asked them to come to Japan to begin a conversation with your government and business leaders. Their presence here is a reflection of the American business community's full faith in Japan's economic recovery.

Let me close by saying again that the hopes and prayers of the American people are with the people of Japan, today and always. The stories we have heard of the courage of the Japanese people, the selflessness shown toward each other, the devotion shown toward their nation, have moved and inspired us.

Last week in Washington the National Cathedral convened a prayer service for Japan. It brought together people from many faiths—Buddhist, Shinto, Hindu, Muslim, Jewish, Christian—who prayed together for healing for Japanese families and a swift recovery for the nation. One speaker was your ambassador to Washington. He said that, “The way ahead is rough, steep, and long. But we can find encouragement in the resilience and civility of the Japanese people,” and in the support shown for you from around the world.

We will hold a prayer for Japan in our hearts, as we walk that long way ahead toward a strong and bright future for this great nation. Thank you.

Minister Matsumoto. Now, as I mentioned and also Secretary mentioned, including public and private sectors, we now have—we would like to promote Japan-U.S. partnership, and we came to an agreement on this. So I would like to report to you about that. We have with us Mr. Yonekura of (inaudible), and also the president, Donohue, of U.S. Chamber of Commerce. These gentlemen are with us, so I would like to introduce these two gentlemen to you, and also would like to invite them to say a few words. So, please, gentlemen.

Q. To Minister Matsumoto and Secretary Clinton I would like to ask a question. Now, in these talks toward the reconstruction after the earthquake, you came to an agreement to establish a partnership between the two countries. When it comes to the support from the U.S. and (inaudible), what is it and what is the schedule for this?

Minister Matsumoto. As you know, Japan is now formulating a blueprint for recovery and reconstruction. And based on this, we would like to have cooperation from the U.S. and other countries in the world. This partnership is to have a cooperation from the Japanese and U.S. economic organizations, firms, think tanks, and NGOs. We would like to have a broad cooperation from the private sector with the government's involvement. That is the aim of this partnership.

With respect to specifically how to proceed, we would like to have a (inaudible) companies. We would like to start with whatever we can.

Secretary Clinton. Well, I agree with the minister's description. We are going to be looking to the Japanese Government and its plans for recovery and, through our consultation, determine how best to utilize our assistance in an appropriate way. And this public-private partnership will be one of the ways that we offer whatever help we can, going forward.

Q. Thank you, Madam Secretary. Thank you, Mr. Foreign Minister. Shaun Tandon with AFP. As you know, the U.S. military presence in Japan has not always been without controversy, particularly in the past couple of years. With a strong U.S. response to the disaster, do you see this as a turning point where there could be a new Japanese attitude toward the United States, and specifically toward the military presence?

And expanding on that, Madam Secretary, you mentioned the generosity of Japan in aid. Is there a concern on the part of either of you that Japan could potentially become more insular because of its great needs at this time? Thank you.

Secretary Clinton. Well, Shaun, as to the first—or as to the second question, I see Japan continuing its global involvement on a range of issues. Of course it has to focus on the disaster recovery. That is what is expected in order to overcome the terrible damage that was done. But the minister and I have an ongoing dialogue about issues affecting Afghanistan and Pakistan, North Korea, the rest of the world. So I see a continuing outreach on those matters.

With respect to the United States military, of course it has been a great honor for our U.S. forces to work with the Japanese self-defense forces in order to provide assistance. More than 14,000 U.S. personnel have been involved in one way or another in offering assistance. And the operation is under the direction of the Japanese Government in response to the needs that the people of Japan have.

But for us, we provide humanitarian assistance and disaster relief around the world. It is our duty, it is our honor, particularly to help our ally, Japan, but we have done it in many places. And it has been a full effort by the U.S. Government because, of course, our military has been very involved, but so have our special disaster teams from US AID, our nuclear experts, and so much more of our governmental assets. This was, for us, a very strongly felt commitment that we were pursuing.

Minister Matsumoto. The U.S. forces in Japan have been engaged in their efforts for the defense of Japan and the civility of this region. The Government of Japan and also the Japanese people have a great understanding about this fact. Now, with respect to the disaster cooperation, through this cooperation was, again, the people of Japan, including when it comes to the U.S.-Japan alliance, including the presence of U.S. forces, they have been encouraged by it. And the U.S. has shown its friendship in the process. And I think we strongly feel it. And I think this is a fact. Thank you.

Q. From the Washington Post. In the initial weeks (inaudible) there seemed to be some U.S. concerns about Japan's transparency or handling in the nuclear incident. Have these concerns been fully allayed at this point? And how?

And in a related question, I wanted to ask about American travel to Japan for you, Madam Secretary, specifically. So, on one hand, you continue to see aftershocks and periodic spikes in radiation, but also this talk of need for economic support. What is your advice to Americans considering travel to Japan? Thank you.

Secretary Clinton. Well, the State Department lifted a travel advisory for all parts of Japan, except the 50-mile radius from the nuclear plants. We have encouraged businesses and other Americans to go on with their normal lives, and to travel to Japan for business or other reasons. And we are very pleased that our commitment to working with Japan has been so deep that we have had many American experts here consulting with Japan on almost a daily basis. The constant effort to respond to the decision—the situation at Fukushima have required intense analysis by Japanese, American, and international experts. And we have been very supportive of what Japan is doing to take the appropriate steps.

I think that the—I think the utility company, Tepco, is going to be releasing later today its plans about how to go forward. Minister asked that I would be sure that those plans were analyzed by our experts, which of course we will do.

But we are doing everything we can to support Japan. And we have very good cooperation. And I would just reiterate what I said earlier. This is a multi-dimensional crisis of unprecedented scope. Our experts are aware of that, and are doing all they can to assist as Japan leads in everything it can do to try to control the situation.

Minister Matsumoto. It is exactly as Secretary said. With respect to provision of information, we certainly have been trying our best. And if there is any information that is not communicated, we will, of course, note to make sure that that doesn't happen. We have made improvements, and would like to continue to make improvements.

Secretary Hillary Clinton delivered this statement in Washington, DC

Secretary Clinton. The United States remains deeply concerned about clashes between security forces along the Thailand-Cambodia border. We strongly urge both sides to exercise restraint, refrain from provocative acts, and immediately take all necessary steps to reduce tensions and avoid further conflict. The loss of life, displacement of civilians, and damage to property is regrettable.

We support the efforts of Indonesia in their role as chair of the Association of South East Asian Nations (ASEAN) to work with both countries to reach a resolution. The United States is also engaging with Thai and Cambodian officials directly on this matter. We continue to urge the Royal Thai Government and Royal Government of Cambodia to resolve their disputes peacefully to help strengthen regional stability.

Secretary Timothy Geithner delivered these remarks at a Discussion on the Upcoming U.S.-China Strategic and Economic Dialogue

Secretary Geithner. Next week in Washington, Secretary Clinton and I will host the third meeting of the Strategic and Economic Dialogue (S&ED) with China. The S&ED brings together senior leaders of the U.S. and Chinese governments to discuss the most critical issues our two countries face, today and into the future.

I want to describe the state of our economic relationship with China, where we are making progress, and where we will next direct our attention.

Over the past two years, we have seen the beginning of promising shifts in the economic policy in China that have the potential to benefit China, the United States, and the world as a whole.

A year ago, China's exchange rate was frozen. Today, it is moving. Since last June, the renminbi has appreciated against the dollar by over five percent, and at an annual rate of about ten percent when China's higher inflation is taken into account. China's leaders increasingly acknowledge the importance of currency appreciation as a tool to fight inflation.

For many years, China maintained comprehensive controls on the movement of funds into and out of the country and on the ability of people outside China to use the Chinese currency. Today, China is taking steps to relax these restrictions.

For many years, China built an economic strategy that was dependent on exports.

Today, China is committed to transforming its economy into one where future economic growth is generated primarily through domestic demand. And China has committed in the G-20 to reducing future external and trade imbalances.

Two years ago, China was taking actions that would further tilt the commercial playing field in favor of Chinese companies and against those companies that compete with them. During his visit to Washington this January, President Hu made important commitments to help level the playing field, by strengthening intellectual property rights protection and enforcement, removing policies that were designed to encourage Chinese technologies at the expense of U.S. and foreign technologies, and moving toward greater government procurement opportunities for non-Chinese companies.

Together, these steps have helped expand opportunities for U.S. producers in China. Last year, U.S. exports grew fifty percent faster to China than to the rest of the world and have now reached $110 billion.

These changes in policy direction offer the prospect of much more substantial economic gains for U.S. companies and workers in the future, provided we see durable changes in actual policies on the ground.

The renminbi remains substantially undervalued. China needs to let the exchange rate adjust at a faster pace to correct that undervaluation.

More rapid exchange rate adjustment will help bring down inflation in China. It will reduce pressure on emerging economies that have open capital markets and allow their exchange rates to adjust. And a stronger Chinese exchange rate will raise the incomes and spending of Chinese households, and it will encourage Chinese firms to produce for the domestic market.

The commitments China made on protecting intellectual property and delinking government procurement and innovation policies during President Hu's visit are a significant step forward. And of course we hope and expect to see continued progress in implementing these commitments effectively.

We will also expand our engagement to encourage a more fair and efficient allocation of credit and capital in China. This is important to level the playing field with China's state-owned enterprises (SOEs), put more money in the pockets of China's consumers, and create opportunities for private enterprises—including for American firms—across a broad range of services.

With its current system of controls on both bank deposit and loan rates, China's financial sector policy is designed to channel low-cost loans to SOEs, by lowering returns to Chinese depositors. Access to low-cost credit gives SOEs an advantage over the private firms—both domestic and foreign, including American firms—that compete with them.

The financial distortions that give preferential advantages to SOEs add to trade tension and to calls for protection among China's trade partners.

Artificially holding down bank deposit rates deprives China's households of income on their largest financial asset, hindering efforts to promote domestic consumption. Restricted deposit rates require Chinese households to save even higher shares of income in order to pay for large purchases such as homes, cars, and education.

China has committed to reform its financial sector as part of its new Five-Year Plan. Through the S&ED, we are encouraging China to allow markets to determine interest rates and the allocation of credit, to develop a more diversified financial system, with deeper bond and equity markets, and to make it easier for foreigners to make portfolio investments in China and for Chinese citizens to make portfolio investments abroad.

As China tries to promote the international use of the renminbi, it will need to modernize its financial system with a wider range of financial sector products and with freer flows of capital, both within China and between China and the rest of the world. We are also encouraging China to provide more opportunities to foreign financial institutions so that they can play a greater role in offering financial products to Chinese individuals and expanding the role of the equity and bond markets in meeting the capital needs of Chinese companies.

We have a lot at stake in this economic relationship, as does China.

China wants continued access to the U.S. market, greater access to U.S. high-tech exports, recognition as a market economy, and new investment opportunities for Chinese firms in the United States.

The United States welcomes investment from China. And Chinese investment in the United States is growing rapidly. A recent survey suggests Chinese investors see America as one of the most attractive markets in the world and one of the easiest in which to do business.

We are willing to continue to make progress on these and other issues that matter to China, but our ability to do so depends on how much progress we see from China on the issues that matter most to us.

Of course, our ability to take advantage of the economic opportunities and to meet the challenges in this relationship depends on our ability in the United States to deal with our economic challenges here at home.

Our great strengths as a country have been in our openness to ideas and talent, our capacity to innovate, our excellence in higher education, a willingness to invest public resources strategically in scientific research and discovery, and the political will to confront challenges with wisdom and force.

We must build on these strengths, even as we make the hard decisions to bring the budget deficit down to a level that will put our overall debt burden, as a share of the economy, on a declining path.

We have made a lot of progress in strengthening our relationship with China over the last two years. We look forward to welcoming the Chinese delegation next week and to discussing with them how we can best build on that progress.

Vice President Joe Biden delivered these remarks at the Opening Session of the U.S.-China Strategic & Economic Dialogue in Washington, DC

Vice President Biden. When President Obama and I took office in January of 2009 we understood—we understood absolutely clearly that our relationship with China would be a key priority. The President and I were determined—determined to set the relationship on a stable course that could be sustained for decades. Our two countries, now the world's two largest economies, were bound by evergrowing ties of commerce and investment. We, the United States, we always talk about what we import; we, the United States, exported $110 billion in American goods and services to China last year.

But we're bound my much more than commerce. Over the last three decades, our people have become increasingly linked through education, through work and through travel. Last year, 130,000 Chinese were studying in the United States. They're really good. We're going to try to keep some of them. I'm only joking. I'm only joking. But they are.

We cannot claim the same number of Americans in China, but our 100,000 Strong Initiative will dramatically increase the number of young Americans living and studying in China. As a matter of fact, my niece who—excuse me, as we say in the Senate, a point a personal privilege— who graduated from Harvard not too long ago, works for Secretary Geithner, she did exactly what we hope another 100,000 will do: She studied Chinese and went and lived in China and is now devoted to making sure the relationship gets better and better and better.

And we're linked by our shared global responsibilities. We both serve as permanent members of the United Nations Security Council. We're both Pacific powers. And for many of the world's pressing challenges, it's a simple fact, that when the United States and China are not at the table, the solution to the problem is less possible than when we are at the table. It's no exaggeration to say that our relationship and how we manage it will help shape the 21st century.

Along with our partners in the G20, we've worked to sustain global economic recovery. We've recognized that the United States-China relations generate global economic benefit, not just to both our countries, but global benefit.

Last year our trade with China supported over 500,000 jobs here in the United States, and we made tangible progress during President Hu's visit, especially in the areas of innovation, intellectual property, and exports, all of which we're following up on.

Over the next two days, we need to build on this momentum and to make sure our commitments are aggressively implemented so we can continue to move.

You may have noticed that there is a debate in this nation how best to secure America's long-term fiscal future. We know that overcoming our economic challenges begin at home. We in the United States have to restore financial stability and we need to make the investments necessary, as well, to win the future. We need to maintain our commitment to what we believe, the President believes, is the pillars of our economic future: education, innovation, and infrastructure.

I know that you're adjusting to your economy in the world situation as well. I know that in China you're working to rebalance your economy and make growth more sustainable, with greater reliance on domestic demand. None of this is easy. But success in re-orienting growth will be not only good for China, in our humble opinion, but it will be good for the United States and for the rest of the world.

The United States and China are the world's largest producers and consumers of energy and we share the common challenges that flow from that. And this creates not only a problem, but great opportunity—great opportunity for common efforts to find clean energy solutions. Secretary Chu likes to say—and I love this expression—“Science is not a zero-sum game.” Science is not a zero-sum game. That amply is illustrated by the remarkable cooperation we've begun to forge in this area. Let me just mention one example.

Our joint Clean Energy Research Center is funding new approaches to energy efficiency, clean coal—which we both need to deal with—and clean vehicles. We need to build on and expand our efforts in this area, and I know you'll be doing—having much discussion these next two days on that area, and it seems to me an area where there's potential for great progress.

On global security challenges, we've also made progress. President Hu joined us at the Nuclear Security Summit—in January, we signed the memorandum of understanding to build a center for excellence to promote nuclear security in China. We have cooperated in stemming nuclear proliferation from both Iran and North Korea, including preventing sensitive technologies from being exported to both those countries.

As I've said earlier, it's important to be straightforward with one another. There is one area where we have vigorous disagreement. And I know and I understand that disagreement, when we voice it, is upsetting or rankles—I don't know how that translates into Chinese—but how it concerns some of our friends in China. We have vigorous disagreement in the area of human rights.

We've noted our concerns about the recent crackdown in China, including attacks, arrests and the disappearance of journalists, lawyers, bloggers and artists. And again, no relationship that's real can be built on a false foundation. Where we disagree, it's important to state it. We'll continue to express our views in these issues, as we did in the Human Rights Dialogue in Beijing two weeks ago.

Now, look, as I said, I recognize that some in China see our advocacy as— human rights as an intrusion and Lord only knows what else. But President Obama and I believe strongly, as does the Secretary, that protecting fundamental rights and freedoms such as those enshrined in China's international commitments, as well as in China's own constitution, is the best way to promote long-term stability and prosperity of any society.

The transformation of China's economy and society since my first trip as a young man in 1979 has truly been breathtaking. I doubt whether it's occurred at any other period in world history—it's been so significant and so rapid. The immense talent of the Chinese people, the incredible hard work and perseverance of the Chinese people and their leaders have literally lifted tens of millions of people out of poverty and built an economy that now helps fuel the world's prosperity. It's remarkable.

During this same period, the relationship between the United States and China has also seen a remarkable transformation—again, through the talent, hard work and respected political leaders who have governed our countries over the last three decades.

The bonds between our country—our countries come about through—have come about through intense engagement from the moment of normalization— events like this one. We've already done much to make our relationship positive, cooperative, and comprehensive. And I'm absolutely confident that we can do more for ourselves and for generations of Americans and Chinese as well.

And as I said, presumptuous of me to say this, if that occurs and continues to occur, it will benefit the whole world. So now it's time to get to work.

Again, welcome, gentlemen; welcome to your delegations. And I thank you all for the honor of being able to address you. Thank you very much.

Secretary Hillary Clinton, Secretary Timothy Geithner, Vice Premier Wang Qishan, and State Councilor Dai Bingguo delivered these remarks in Washington, DC

Secretary Clinton. Strategic and Economic Dialogue is the premier forum in a bilateral relationship that is as important and complex as any in the world. Since we first gathered in Washington back in 2009, the depth and breadth of our discussions and the participation across our two governments have grown significantly.

Through these meetings and the conversations that take place within them, both the informal conversations like the ones we had last night over dinner at the Blair House and the formal meetings, we seek to build a stronger foundation of mutual trust and respect. This is an opportunity for each of us to form habits of cooperation that will help us work together more effectively to meet our shared regional and global challenges and also to weather disagreements when they arise. It is a chance to expand the areas where we cooperate and to narrow the areas where we diverge, while both of us holding firm to our values and interests.

Now more than ever, with two years of Dialogues behind us, success depends on our ability to translate good words into concrete actions on the issues that matter most to our people. So as we begin this third round, we will keep that goal in clear focus.

Our work really begins with our commitment to better understanding one another, to building trust between each other, and to working to avoid misunderstanding and miscalculation. We all know that fears and misperceptions linger on both sides of the Pacific. I will be very open about that. Some in our country see China's progress as a threat to the United States. Some in China worry that America seeks to constrain China's growth. We reject both those views. We both have much more to gain from cooperation than from conflict. The fact is that a thriving America is good for China and a thriving China is good for America. But to work together, we need to be able to understand each other's intentions and interests. And we must demystify long-term plans and aspirations.

That is why, for example, Secretary of Defense Robert Gates and I have spoken often about the importance of developing more sustained and substantive military -to-military engagement that increases transparency and familiarity. So I am very pleased that for the first time, senior military officials from both sides will participate in this Dialogue. They will join civilian counterparts to discuss how we can reduce the dangerous risks of misunderstanding and miscalculation. In particular, I would like to thank Deputy Chief of the PLA General Ma for being with us for these important discussions.

We are also working to build greater understanding and trust between our citizens and to foster stronger ties between our students, our businesses, and our communities, expanding on the consultations that were held here in Washington last month. That includes the 100,000 Strong program. This is a program to boost educational exchanges and to create new links between entrepreneurs and investors. I'm looking forward to lunching with business leaders from both of our countries. We're also emphasizing programs to connect women leaders and a new initiative to bring together state and provincial officials. And of course, we want to continue our strong people-to-people diplomacy. Building mutual trust and respect will help us to solve shared problems. We both have a great stake in curbing climate change and charting a clean and secure energy future. We both care about promoting responsible and sustainable development around the world, and we both are committed to stopping the dangerous spread of nuclear weapons.

China and the United States face a wide range of common regional and global challenges. How our two countries work together to meet those challenges will help define the trajectory, not only of our relationship going forward, but the future peace, prosperity, and progress of the world. Whether it's the global financial crisis, or the upheaval in the Middle East, recent history has underscored the link between our economies and global security and stability. And that intersection is at the heart of our dialogue. So we will be discussing the need to work together to rebalance the global economy and assure strong, sustained future growth.

There are some very important international security issues we will be discussing. As permanent members of the United Nations Security Council, the United States and China came together to enact tough sanctions on Iran, and now we are working to implement them. Our two countries share a vital interest in maintaining peace and stability on the Korean Peninsula, and that includes the complete denuclearization of the peninsula. So we continue to urge North Korea to take concrete actions to improve relations with South Korea and to refrain from further provocations, and we want to see North Korea take irreversible steps to fulfill its international obligations toward denuclearization.

Now, like any two great nations—in fact, I would argue like any two people— we have our differences. And like friends, we discuss those differences honestly and forthrightly. We will be continuing the discussion of the recent U.S.-China Human Rights Dialogue just held in Beijing. We have made very clear, publicly and privately, our concern about human rights. We worry about the impact on our domestic politics and on the politics and the stability in China and the region. We see reports of people, including public interest lawyers, writers, artists, and others, who are detained or disappeared. And we know over the long arch of history that societies that work toward respecting human rights are going to be more prosperous, stable, and successful. That has certainly been proven time and time again, but most particularly in the last months.

The United States is practicing what we call forward deployed diplomacy. We're expanding our presence in people, programs, and high-level engagement. We've renewed our bonds with our allies. We broaden our involvement with multilateral institutions. And the first time ever this year, President Obama will participate in the East Asia Summit. So we have a lot of work ahead of us, both bilaterally and regionally and globally, and we have a lot to cover in a short time.

So again, I am delighted to welcome all of you here to express my confidence in this relationship and in the importance of this dialogue. And it is now my great honor to invite Vice Premier Wang to address you.

Vice Premier.

Vice Premier Wang. Secretary Clinton, Secretary Geithner, dear colleagues, we are gathered here today for the third round of China-U.S. Strategic and Economic Dialogues. On behalf of the Chinese delegation, I would like to express sincere thanks to the U.S. side for the (inaudible) arrangements. President Hu Jintao attaches great importance to the S&EDs. He asked me and State Councilor Dai Bingguo to convey his greetings to President Obama, Vice President Biden, Secretary Clinton, Secretary Geithner, and all those who work for the S&EDs on the U.S. side.

President Hu Jintao highly appreciates the important role of the S&EDs in deepening understanding; enhancing strategic, mutual trust; and strengthening communication and cooperation between our two countries at bilateral, regional, and global levels. He hopes that both the Chinese and U.S. sides will make the most of this round of dialogues to have in-depth exchange of views on ways to further enhance strategic, mutual trust, and deepen practical cooperation. He looks forward to the implementation of the agreement he reached with President Obama and the advancement of the U.S.—of the China-U.S. cooperative partnership based on mutual respect and mutual benefit.

Dear colleagues, last January, President Hu Jintao paid a state visit to the United States. It was a historic visit which achieved great success. With vision and foresight, the two presidents opened a new page in China-U.S. relations. Over the past 32 years since the establishment of diplomatic ties between China and the United States, China-U.S. relations have kept moving forward despite twists and turns. Our two countries differ in history, culture, development stage, resources, endowment, and national circumstances, but we are highly interdependent and mutually complementary economically.

China and the United States are each other's second largest trading partner. The United States is China's second largest export market. And China is the fastest growing export market for the United States. Together, China and the United States account for one third of the world's GDP and one fifth of global trade. China-U.S. relationship has far exceeded the bilateral scope and has acquired growing global significance. We are witnessing profound and complex changes in the world economic landscape, changes that are driven by globalization. At present, we still face many uncertainties while we are striving to tackle global economic recession and sustain economic recovery. Against such a backdrop, economic and social development in China and the United States face both common challenges and opportunities of cooperation.

Now, there are both complementarities and clashes in our respective policies geared to ensure economic recovery. However, we have far more shared interests and cooperation than differences and competition. Both sides must, therefore, make better use of the S&EDs as an overarching framework for the examination of long-term and strategic issues, and take forward steps to advance the sound development of China-U.S. economic relations.

Dear colleagues, the past and the present have proven, and the future will prove, that nothing can hold back the trend of China-U.S. cooperation. We have confidence in that. Our confidence comes from the broad, common interests between our two countries, the shared aspirations of our two peoples, as well as from historical and philosophical reflections. One action is better than 1,000 words. Let us use that opportunity brought by the current round of the S&EDs to earnestly implement the important agreement reached between our two presidents, and deepen our cooperation in economic, trade, investment, financial infrastructure, and other fields in an all-around way. By so doing, we will contribute to the strong, sustainable and balanced growth of not only our two economies, but also the world economy. I wish the third round of the S&EDs great success.

Thank you. Now, I would like to invite Secretary Geithner to address you.

Secretary Geithner. I want to start by joining Secretary Clinton and my U.S. colleagues in welcoming the Chinese delegation. Vice Premier Wang and Councilor Dai, it's good to see you again in Washington.

When the Strategic and Economic Dialogue first met in Washington two years ago, President Obama said the United States and China share mutual interests; if we advance those interests through cooperation, our people will benefit and the world will be better off because our ability to partner with each other is a prerequisite for progress on many of the most pressing global challenges.

Now we have worked carefully and deliberately since then to demonstrate that basic truth, and our economies are stronger today because of the commitment of President Obama and President Hu to deepen our economic relationship even as we each confront significant economic challenges at home. I want to compliment Vice Premier Wang for his leadership in this joint effort. He is a tough and forceful defender of China's interests. He focuses on the practical and the achievable. And he recognizes that China's economic success depends on a growing world economy and a strong relationship with the United States.

When President Obama and President Hu launched the Strategic and Economic in London of April—in April of 2009, the world economy was in the grip of the worst financial crisis since the Great Depression. Today, thanks in no small part to the actions of the United States and China, we have put out the worst of the financial fires and the world economy is growing again. And because of the success of the cooperative strategy we launched together with the G-20, world trade is now expanding rapidly, companies around the world are investing in hiring, and fears of deflation have receded.

But of course, we still face very significant though very different economic challenges at home. In the United States, even after a year and a half of positive economic growth and more than 2 million private sector jobs created, unemployment is still very high and we still have a lot of work to do here in repairing the damage caused by our crisis. Our challenge in the United States is to strengthen the foundations for future economic growth, and this requires a sustained effort to improve education, to strengthen incentives for innovation and investment, even as we put in place the long-term fiscal reforms that will force us once again to live within our means as a nation.

In China, building on the remarkable reforms of the last 30 years, the challenge is to lay a foundation for a new growth model driven more by domestic demand with a flexible exchange rate that moves in response to market forces with a more open, market-based economy and a more developed and diversified financial system.

State Councilor Dai. Thank you. Dear friends, just now I heard from my colleagues said all that I have to say, so I would be brief.

Secretary of State Hillary Clinton, Secretary of the Treasury Timothy Geithner, Vice Premier Wang Qishan, ladies and gentlemen, dear friends, it is a great pleasure for me to join you at the third round of the China-U.S. Strategic and Economic Dialogues here in Washington. We meet at a unique point in the history of China-U.S. relations, as this year marks the 40^th anniversary of the Ping Pong Diplomacy and of Dr. Kissinger's secret visit to China. Forty years ago, the desire of the Chinese and American people for friendly interactions, together with the decisiveness and the courage of our political leaders, produced an unstoppable force of history. It pushed open the door of engagement between our two countries that had remained shut for over 20 years. Since then, no force in the world has ever had the power to close that door again.

Secretary Hillary Clinton, Secretary Timothy Geithner, Vice Premier Wang Qishan, and State Councilor Dai Bingguo delivered these remarks in Washington, DC

Secretary Clinton. Good afternoon. I want to begin by thanking our Chinese colleagues, led by Vice Premier Wang and State Councilor Dai and the entire Chinese delegation for a productive and comprehensive dialogue between us. And I also, along with Secretary Geithner, want to thank everyone on the American side, not just those from the State Department or Treasury but indeed from across our government. The unprecedented level of involvement and the extraordinary work that has taken place since our last S&ED in Beijing was truly impressive.

The Strategic and Economic Dialogue continues to grow broader and deeper. It reflects the complexity and the importance of our bilateral relationship. And we have covered a lot of ground together, and I'm happy to report we have made a lot of progress. The list of agreements and understandings reached is quite long. We have seen concrete progress on a wide range of shared challenges, from the energy and environment to international trade and security. For example, there is now a new partnership that will bring U.S. and Chinese companies and universities together. Those which are developing innovative environmental technologies will now be working bi-nationally and with local governments and NGOs to promote sustainable development projects such as next generation batteries for electric cars, and new clean air and water initiatives. Already, Tulane University in New Orleans and East China Normal University are collaborating to improve the conservation of wetlands, and we have seen many other examples.

We are also laying the groundwork for potentially significant future collaboration on development, from working together to innovate and distribute clean cookstoves and fuels to strengthening public health systems in developing countries. And our people-to-people programs continue to expand, most notably our “100,000 Strong” Student Exchange Initiative, which has already raised the stated goal of dollars to go along with the very generous Chinese Government support for 20,000 American students because all of us are committed to increase more people-to-people interactions and opportunities. Now, I am well aware that these specific and very substantive partnerships may not produce major headlines, but I think they do reflect our shared commitment to translate the high-level sentiments and rhetoric of these diplomatic encounters to real world benefits for our citizens, our countries, and the wider world.

Just as important, although perhaps even harder to quantify, are the habits of cooperation and mutual respect that we've formed through these discussions. We believe that to keep our relationship on a positive path, as foreseen by Presidents Obama and Hu, the United States and China have to be honest about our differences and address them firmly and forth-rightly. At the same time, we are working together to expand the areas where we cooperate and narrow the areas where we diverge. And we are building up a lot more understanding and trust. So we discussed everything, and whether it was something that was sensitive to us or sensitive to them, all the difficult issues, including human rights. And we both have made our concerns very clear to the other. We had candid discussions on some of our most persistent challenges, from addressing North Korea and Iran to rebalancing the global economy.

We agreed on the importance of cooperating in Afghanistan to advance common goals of political stability and economic renewal. We established a new U.S.-China consultation on the Asia-Pacific region, where we share a wide range of common interests and challenges. And for the first time in these dialogues, senior military and defense leaders from both sides sat down face to face in an effort to further our understanding, to develop trust, and avoid misunderstandings that can lead to dangerous miscalculations. This new strategic security dialogue is a very important step forward, and we think it will add immeasurably to our bilateral relationship.

As we have discussed these issues and as we have committed to keeping the relationship moving forward, we have some milestones ahead of us. For the first time, President Obama plans to participate in this year's East Asia Summit. And Vice President Biden will travel to China this summer, continuing our discussions on the full range of shared regional and global challenges. And he hopes to return the hospitality by welcoming Vice President Xi Jinping to Washington at a later date. I look forward to seeing our Chinese partners at the ASEAN Regional Forum in Indonesia, and both the President and I and the Secretary are greatly anticipating the United States hosting APEC in Hawaii.

Now, those are just a few of the highlights. But day to day, at every level of our governments, we are working hard to build that positive, cooperative, comprehensive relationship that our two presidents have asked for. This is the long, hard, unglamorous work of diplomacy. At our plenary sessions that State Councilor Dai and I chaired yesterday, there was a dizzying array of issues that we are working on together, and I felt very satisfied because that was not the case two years ago. And I anticipate that we are going to see further progress, because we want to realize the full promise of our partnership, and we very fervently hope to leave a more peaceful and prosperous world for our children and our children's children.

So let me again thank our Chinese friends for making this long journey and for working as we move forward on our journey together into the future.

Now, I am pleased to turn to my colleague and partner, Secretary Geithner.

Secretary Geithner. Thank you, Secretary Clinton. Let me outline the highlights of our discussions on the economic side.

We had a very comprehensive discussion about a full range of economic issues between us and facing the global economy. As always, we reviewed the major risk and challenges to our—to growth domestically in China and the United States, and we talked about the major risks and challenges on the global economic front. We talked about the investment climate in both countries. We talked about energy policy, financial reform— very comprehensive discussions. And we benefited on the U.S. and on the Chinese side from an exceptionally talented and very senior delegation of financial exports—experts, members of the cabinet, regulators, et cetera. And that's very important.

Now, our three key objectives on the U.S. side were: first, to encourage the ongoing transformation of the Chinese economy away from its export-dependent growth model of the past to a more balanced growth strategy led by domestic demand; to encourage China to level the competitive playing field between U.S. and Chinese companies, both in China and around the world; and to strengthen our engagement with China on financial reform issues in both countries.

And we have made very, very significant progress in our economic relationship over the past two years. Our exports to China reached $110 billion last year and are growing about 50 percent faster than our exports to the rest of the world. And those exports are all the things Americans create and build—from agriculture, all sectors of manufacturing, services, and advanced technology—and they support hundreds of thousands of jobs across the United States.

Now, overall, we are seeing very promising shifts in the direction of Chinese economic policy. First on the exchange rate, since last June, as you know, the Chinese currency, the renminbi, has appreciated against the dollar by more than 5 percent, and at an annual rate of about 10 percent when you take into account the fact that Chinese inflation is significantly faster than that in the United States.

We hope that China moves to allow the exchange rate to appreciate more rapidly and more broadly against the currencies of all its trading partners. And this adjustment, of course, is critical not just to China's ongoing efforts to contain inflationary pressures and to manage the risks that capital inflows bring to credit and asset markets, but also to encourage this broad shift to a growth strategy led by domestic demand.

China has outlined in its Five-Year Plan a comprehensive set of reforms, again, to shift its growth strategy away from one relying on exports to domestic demand. China has joined a broad commitment with other countries in the G-20 to put in place mechanisms to reduce the risk that we see once again the emergence of large, external imbalances that could threaten future financial stability and future economic growth.

This process is going to take time, and of course, it's going to require a sustained effort of reform. But of course, it's essential to the future health of the global economy and the trajectory of future growth in China. Again, we're seeing progress here, too. If you just step back from and look, China's current account surplus as a percent of GDP peaked at about 10 percent before the crisis. It's now around 5 percent, and of course, we'd like to see that progress sustained.

This brings me to the third area, the third area of focus in our discussions, which is how to create a more level playing field. In our meetings over the last few days, we've seen some very important steps towards that goal, and let me just review a few of them. First, China committed to making long-term improvements in its high-level protection of intellectual property rights and enforcement regime to strengthen the inspection of government software and use at all levels of government. And this will help protect U.S. innovators as well as Chinese innovators in all industries, not just in software. And I think that's very important.

China also confirmed that it will no longer employ government procurement preferences for indigenous innovation products at any level of government. And this is important to make sure, of course, that U.S. technology, U.S. firms, can compete fairly for business opportunities in China.

China has committed to increased transparency, requiring government authorities to publish regulations at least 30 days in advance, so again, that U.S. firms, all foreign firms, have the chance to see those informations—see those regulations in draft and they have the opportunity for input just as their Chinese counterparts do.

China and the United States, recognizing the importance of transparency and fairness in export credit policies, have agreed to undertake discussions on export—on the terms of our respective export credit policies. And this is important, of course, because China, by some measures, is the largest provider of export credit on—in the world.

And finally, we've been discussing with the Chinese authorities the important objective of how to make sure that companies in China that compete with state-owned enterprises are not put at a broader disadvantage.

The final focus of our discussions on the economic side was China's ongoing financial reforms to create a more open, more flexible, more dynamic, more developed financial system. And these reforms, which are designed to increase the returns to savers, to further develop China's equity and bond markets, and to expand opportunities for foreign financial institutions in China are very important and very promising, not just, of course, in expanding opportunities for U.S. institutions but also reinforcing this broad shift in strategy by the Chinese Government towards a growth strategy led by domestic demand.

Now, when President Hu visited Washington in January, President Obama described the evolution of our relationship as—quote—“a healthy competition that spurs both countries to innovate and become even more competitive.” And of course, just as China faces significant economic challenges at home, we have our challenges in the United States, too. And we are working very hard not just to repair the damage caused by this financial crisis, but to make sure that as we restore fiscal sustainability, as we return to living within our means as a country, we're making sure we preserve the capacity to invest in things that are going to be critical to the future strength of the American economy. And I can say, based on the strength of our conversations and the strength of this emerging relationship, that this economic relationship with China is—will continue to grow, continue to deepen, and continue to provide tremendous opportunities for both nations. And you see today concrete, tangible signs of progress on both sides that underscore that commitment of both our presidents.

In conclusion, I just want to end where Secretary Clinton began, which is to thank the delegations on both sides, both the American and Chinese participants in these discussions. They brought a directness and candor and, frankly, greater openness than we've seen in the last two years, and I think that is very welcome. And I want to express my personal gratitude to Vice Premier Wang for his leadership in these discussions, and to compliment him for the very substantial changes he's already been able to bring about. Thank you very much.

Vice Premier Wang. Dear friends from the press, under the guidance of President Hu Jintao and President Obama and thanks to the joint endeavor of the both sides, the third round of China-U.S. Strategic and Economic Dialogues has been a great success. The essential mission of our economic dialogue is to implement the important agreement reached between the two presidents during President Hu Jintao's recent state visit to the United States this past January and to implement the building of China-U.S. comprehensive and mutually beneficial economic partnership.

We had in-depth discussions of our overarching strategic and long-term issues in bilateral economic cooperation, and arranged a host of win-win outcomes. Particularly, Secretary Geithner and I signed a China-U.S. comprehensive framework promoting strong, sustainable, and balanced economic growth and economic cooperation. Under the framework, the two countries will carry out an expanded, closer, and a more extensive economic cooperation. We agree that in today's extremely complex economic environment, our two nations should further step up macroeconomic policy coordination and communication, and contribute to steady and sound economic growth in both countries.

We discussed the implications of European sovereign debt crisis, the nuclear leak disaster triggered by Japan's earthquake, the turbulence in the Middle East for the global economy, and we highlight the international community should work together to ensure strong and a sustainable world economic recovery, to effectively advance the reform of global economic structure, to gradually build a fair and a reasonable international economic order.

The two sides agree that in a transformation of our respective growth models and economic restructuring, we will use respective strength and expanded cooperation in railway, power grids, and other infrastructure programs, and in clean energy, green economy, and science and technology innovation, and expand bi-national and the corporate exchanges and cooperation.

We highlight our commitment to build a more open trade and investment system. The United States commits to accord China fair treatment in a reform of its export control regime, relax high-tech exports control towards China, and to consult through the JCCT in a cooperative manner to work towards China's market economy status in an expeditious and a comprehensive manner. And the two sides will strengthen cooperation in bilateral investment treaty negotiation and strengthen cooperation in IPR protection, food safety, and product quality. We will advance Doha round negotiations and reject trade and investment protectionism.

We also had in-depth discussions of financial cooperation and agreed to strengthen information-sharing and cooperation regarding the regulation of systemically important financial institutions, shadow banking, business, credit rating agencies, the reform of remunerations policy and combating illegal financing, and to jointly advance international financial architecture reform. The United States welcomes Chinese financial institutions to invest in America and to recognize China's enormous progress in capital adequacy ratio, comprehensive consolidation supervision, and the other regulatory aspects. The United States commits to further enforce strong supervision of government-sponsored enterprises and to make sure they have enough capital to fulfill financial obligations.

Knowing oneself and each other is an important prerequisite for cooperation. In the economic dialogue, we increased our mutual understanding, expanded consensus, and arranged outcomes. This will give a strong boost to the growth of the China-U.S. comprehensive partnership based on mutual respect and mutual benefit.

I thank you, everyone, and I would like to thank Secretary Geithner and Secretary Clinton and the U.S. team for all the work you have done for a successful economic dialogue. Thank you.

State Councilor Dai. Dear friends from the press, it's a great pleasure to meet with you once again. The China-U.S. Strategic and Economic Dialogues have already completed its third round. For each and every round, we invite friends from the media to come here to draw a successful conclusion, so I'd like to thank you. This round of dialogue was held as President Hu Jintao paid a successful state visit to the U.S. earlier this year. The two sides agreed to build a China-U.S. partnership based on mutual respect and mutual benefit.

I want to tell you the following: First, on the strategic track, Secretary Clinton and I focused on the agreement of our two leaders and exchanged views on how to build a China-U.S cooperative partnership based on mutual respect and mutual benefit. We had in-depth and practical exchange of views.

Our dialogue covered many issues, including China-U.S. bilateral relations, major issues internationally and regionally, and we had a good conversation. We agreed that we must act in accordance with the spirit of the China-U.S. joint statements, work to increase our strategic mutual trust, enhance exchanges at higher levels, have closer dialogue on international and regional issues, and to further increase our people-to-people exchange. We issued an outcome list of the strategic track which covered energy, environment, science, technology, transport, forestry, and climate change cooperations. I said we had a good conversation, and I did not mean that we agreed on each and every issue. However, after each round of dialogues, we successfully expanded our mutual understanding and increased our mutual trust and enhanced our cooperation, and this has added to our confidence of further developing our bilateral relations in the future.

Secondly, both of us agreed that we must increase our strategic mutual trust and deepen our practical cooperation. The U.S. had reaffirmed that it welcomes a strong, successful, and a prosperous China that plays a greater role in international affairs, and it does not seek to contain China. It respects China's interests. And both sides reaffirmed their commitment to a peaceful—the Chinese side reaffirmed its commitment to the road of peaceful development, and will not challenge the United States interests.

A China-U.S. strategic security dialogue is a very important outcome of this dialogue. We agreed to hold this dialogue within the framework of the Strategic Dialogue, and held its first round of meeting this morning, and the China-U.S. strategic security dialogue will continue to be held in the future. We also talked about further deepening our bilateral cooperation and fostering new areas of cooperation and make our—the pie of our common interests bigger and more tasteful.

Thirdly, we agreed that we will work together in the Asia-Pacific region so that we can better coordinate with each other and better interact with each other in the Asia-Pacific. We agreed that Asia Pacific is broad enough to accommodate the interests of China and of the United States. We must work together in this region, work together with other countries in this region to uphold peace, stability in the Asia-Pacific and to promote the sustained prosperity of the Asia-Pacific and achieve the common development of all countries in this region so that the Pacific Ocean will become a peaceful one. We agreed that we will set up a consultation mechanism for Asia-Pacific region.

Fourthly, we both agree that we must work globally and respond to international as well as domestic challenges. Recently, there have been new and important changes in the international situation. For China and the United States as two influential countries, it is important that we have more consultation, coordination, and cooperation in order to promote and safeguard peace, stability, and the prosperity of the world. I wish to tell the friends from the media that the Strategic and Economic Dialogue, since its inception, has played a very important role in enhancing our mutual trust, coordinating our position, and promoting our mutually beneficial cooperation. China is ready to work with the U.S. side to further grow and make good use of this S&ED dialogue and mechanism so that it can better serve China-U.S. relations. On how to make use of this mechanism, I think we are open to the good suggestions and proposals from the friends of the media.

To conclude, like Vice Premier Wang Qishan, I would like to thank Secretaries Clinton and Geithner as well as colleagues and staff from China and from the U.S. for your hard work to ensure the success of this round of dialogue. I wish to thank the U.S. side for your thoughtful arrangements and to thank you, friends, from the media for your interest in this dialogue. I'm looking forward to seeing you again in Beijing next year and continue our dialogue. Thank you.

President Barack Obama and Prime Minister Naoto Kan delivered these remarks in Deauville, France

President Obama. I just want to, very briefly, say how glad I am to have an opportunity to discuss important issues with Prime Minister Kan once again. As I've said so often, we have one of the strongest alliances that has made both the United States and Japan safer and more prosperous for half a century now.

And obviously all of us were heartbroken by the extraordinary devastation that took place recently as a consequence of the tsunami and the earthquake and the nuclear crisis in Japan. I repeatedly expressed to Prime Minister Kan that the U.S. will stand by Japan for as long as it takes to help recover. And we are confident that Japan will emerge from these difficult times stronger than ever.

In the meantime, we're going to continue to work together on a whole range of international and bilateral issues. Japan has been a huge contributor to our efforts to deal with Afghanistan, to increase development there. They have been a strong supporter and contributor to Pakistan and its efforts to improve government services in that country, development in that country.

We've worked together on issues like Iran sanctions. We've worked together on a range of international development opportunities. And obviously we continue to work together very closely in terms of security in East Asia, whether that's issues of how North Korea operates and making sure that they actually implement a denuclearization process, or thinking about the long-term security structures in East Asia.

We've also had the opportunity to work together closely on trade issues, and we're both committed to making sure we're continually expanding opportunities for trade and commerce in the Asia Pacific region.

So we have no better friend than the Japanese people. We are deeply respectful of the outstanding leadership that Prime Minister Kan has provided during a time of great crisis in his country. And we want to emphasize to the Japanese people that we will be with them throughout the rebuilding process, and are very confident that Japan will continue its role as a global leader.

I apologize to the translator for not breaking that up into its component parts.

Prime Minister Kan. This is the first opportunity to meet President Obama after the earthquake disaster, and I would like to reiterate my sincere gratitude for the United States and its support. And right after the disaster of the earthquake, we received a call from President, and since then, we have three times had a telephone conversation. Right after the disaster the United States sent an aircraft carrier, the Ronald Reagan for its activity—the U.S.-Japan's activity under Operation Tomadachi.

And as for the nuclear reactor accident, the United States provided us with the human resources and experts, and also the equipment, without hesitation. And through this series of actions shown by the United States, and particularly President Obama, we fully and deeply recognize the depth of the Kizuna, or the bonds of friendship, between Japan and the United States. And Japanese people are deeply grateful for what the United States has done.

As for the assistance provided from the United States, Japan will definitely recover and reconstruct itself so that we will be participating, together with the United States, in various agenda in the global fora, and we would like to further increase our capability to do so, and I'm sure that we can do that.

Even since before the earthquake and the disaster, we have been working on the rebirth of Japanese economy and fiscal conservation and reform in Japan's social security and those various challenges. And the work on those agenda came to a halt right after the earthquake. But along with our efforts on reconstruction from the disaster, we will be working on those challenges which have been pointed out even since before the earthquake.

Japan has been planning its policy of a third opening of Japan after the Meiji Restoration and the era right after the Pacific war. And the third opening was to open the country again to the world by proactively working on its economic and trade liberalization and deepening its ties with the world. And we will be working hard again on these issues.

And in our efforts to liberalize this trade liberalization there is this issue of TPP, and our original intention was to make a decision on the negotiations—our stance on the negotiation for a TPP in June. And that has been our policy that there has been a delay in the schedule because of the disaster. But I would like to make the policy in the near future—not so late in the near future.

And we are fully aware of the various issues in the world such as the Middle East and North Africa, and Iran and Syria, and Afghanistan and Pakistan. And Japan will continue to pursue our efforts in those areas, including in our assistance to Afghanistan and Pakistan. And where we can, we will provide assistance and we would like work together with the United States on these issues.

And, of course, we will be working together on the situation in East Asia, which deeply relates to the security of Japan. And we have the issue of North Korea and its nuclear development, and how to stop their nuclear development is a challenge. And also we have this issue of abduction by North Korea, and we will continue to pursue its resolution with the assistance of the United States. And we will also work to ensure the denuclearization of North Korea.

In any case, we will first work on the reconstruction of the Japanese economy so that it will be revitalized and enable us to make efforts on these issues in a proactive manner. And we have been receiving a lot of assistance from the United States, and we will continue to ask for your cooperation.

Secretary Robert Gates delivered these remarks while en route to Singapore

Secretary Gates. Let me just say a word about going to Shangri-La. This will be the fifth consecutive time I've done this. I think one of the things that has surprised me coming back to government despite all the controversies of recent years and the Iraq war and everything else has been the very broad interest on the part of many countries to strengthen the relationship with the United States and to have a stronger partnership with the United States. And I don't think this is true anywhere more than in Asia.

And I think that there has been really extraordinary progress made, particularly in—I would say in the last couple of years or so with a number of countries in strengthening our military-to -military relationships and our overall relationship— Singapore, Indonesia, Vietnam, Philippines, Malaysia, Australia certainly, as well as our traditional allies in Thailand, Japan, and Korea. Obviously, a lot of attention focused on Southeast Asia at Shangri-La.

And I think the general recognition on the part of all the countries over the past several years that their own security environment is evolving and their desire to adjust their own positions accordingly and the need for us to be flexible as we develop our relationships with these countries and the nature of the activities that we have with others, whether it's exercises or training programs or equipment or whatever.

So I see—and what I will largely talk about at the conference is the evolution and the changes in these positions and kind of where we are and moving to the future, but it is this—it goes back to what I have said, frankly using Madeline Albright's term that the one thing that has been brought home to me again in this job is how many countries around the world truly do consider the United States the indispensable nation. We are often the catalyst not only for bilateral relationships, but for multilateral, the development of multilateral cooperation. And we are willing to partner with the people in these things.

And I think as the kinds of problems that the world is facing make it more difficult to have to be successful with a unilateral approach, the opportunity to build these partnerships it becomes even more important.

Obviously, China plays a big part in this. We're very satisfied with the progress of the relationship. My first visit to China in this job was in the fall of 2007. I laid out a fairly ambitious agenda for developing our military-to-military relationship. We've obviously hit snags and obstacles along the way, but I think we're in a pretty good place now, pretty realistic.

And if anything, what all of this has sort of suggested to me is we need more of what is almost always in short supply when it comes to the United States and its government, and that is patience, that these relationships take time to develop. And we get very impatient because our timelines are always short. And we just— we need to understand that these things develop over time. So why don't I stop there.

Q. Another thing that's going to be in short supply besides patience is money. You've been forthright in talking about how the downward pressures on the budget make the American people have to say what it can forego having the military do. They should look at Asia, are there things the military is doing in Asia now that can be jettisoned or are there risks that you see in what we can do in Asia by the downward pressure on the budget?

Secretary Gates. Well, I think that in a way many of the things that we're doing in Asia in building these relationships are actually pretty cost effective—training, exercises, rotations of forces and so on are—and the use of our Navy, our air assets moving from place to place. I think these are all cost effective ways of enhancing our influence, but also letting these countries know that we're a reliable partner and that we can be counted on.

But it does—I would say, if anything these pressures put a premium on multilateral responses to problems. And whether it's humanitarian assistance or disaster relief, where we see opportunities with a number of countries out here, including China, to deal with what seem to be all too frequent natural disasters that occur in Asia.

So I think that, as I said once before, everything will be on the table, but I believe that our approach to enhancing our relationships, our presence and our influence in Asia is a very cost effective approach.

Q. To pick up on your comment about being in a pretty good place with China right now, the relationship, obviously, as you said has had its ups and downs. And it is currently on the ups. But at this moment there's also pressure to do—pressure building in Congress to move ahead with the F-16 sale, and I wondered whether you think the benefits of that to Taiwan's security would outweigh the costs that would be incurred in the relationship with China?

Secretary Gates. Well, we do have obligations under the Taiwan Relations Act. And we have this discussion in virtually every meeting that we have with the Chinese. I would say that I think under both the Bush and Obama administrations, we have tried to thread the needle pretty carefully in terms of Taiwan's defensive capabilities, but at the same time being aware of China's sensitivities. I think both administrations have done this very thoughtfully and very carefully. By the same token, there is—just as the Chinese are very open with us about their concerns, we are also open with them about our obligations.

Q. What's your judgment about the F-16 sale—(off mike)?

Secretary Gates. I don't have a view on that at this point.

Q. Sir, does the—at this point it's a relatively, as far as historical terms, good relationships between Taiwan and Beijing? And does that give you any confidence that the ups and downs, that there may be a way around the ups and downs in the mil-to-mil relationship for your successor? I mean, you came in, thought things would go well, had a long period when things didn't go well, things are a little bit better now. What might give us some hope that it won't be Groundhog Day, in the words of Geoff Morrell?

Secretary Gates. Well, I don't know the answer to that because I think we don't know how the next months or a year or two will evolve. What is clear to me is that President Hu and President Obama have a shared interest in strengthening this relationship. They both believe that the military part of this relationship is underdeveloped compared to the military— compared to the political and economic elements of the relationship.

So, I think General Chen's visit to the United States, the fact that the Chinese have upgraded their representation for the first time at Shangri-La to their minister of defense—I think we'll just have to see how it plays out. And as I said a minute ago, be patient.

Q. As the PLA chief you referred to talked about how he felt that the army chief, the Chinese PLA chief Chen said during his visit that he felt that the whole Chinese threat had been hyped— that the Chinese military buildup had been hyped. Is that the case? And if not, how would you describe the potential threat that the Chinese military poses and how has that been trending in the past year or so, and including their behavior and their actions?

Secretary Gates. I think that their military modernization is proceeding apace. They are clearly working on capabilities that are of concern to us in terms of denial of access, particularly with respect to our aircraft carriers, the development of long-range accurate cruise and ballistic anti-ship missiles.

I seem to have some recollection of them having a demonstration of a stealth aircraft, fighter aircraft. I think clearly some of their work in cyber and anti-satellites. So, you know, my sense of it is that they are—and in their efforts frankly to build a blue water navy.

So I don't have the sense that—let me rephrase that. I think the Chinese have learned a powerful lesson from the Soviet experience and they do not intend to try and compete with us across the full range of military capabilities. But I think they are intending to build capabilities that give them considerable freedom of action in Asia and the opportunity to extend their influence.

Now, one of the things that I've thought since I took this job was that under those circumstances there is value in a continuing dialogue by the two sides of just exactly what our concerns are, what our issues are, and how we might alleviate the concerns on both sides. And that's why I have believed all along that this strategic dialogue is so important. We are not trying to hold China down. China has been a great power for thousands of years. It is a global power and will be a global power.

So the question is, how we work our way through this in a way that assures that we continue to have positive relations in areas like economics and other areas that are important to both of us and manage whatever differences of view we have in the other areas?

Q. Do you think the tested fighter jet in China, do think there is still a disconnect? And on Japan, the letter (inaudible)?

Secretary Gates. Well on the latter one, we have in just three weeks; we have a 2-plus-2 meeting with the Japanese. We remain committed to the positions that have been agreed with the Japanese, we will sit down at that session and see, you know measure the progress that's being made and what the prospects are and then together we'll decide on the next steps for moving forward. In terms of the senators letter they've clearly looked at it closely. Frankly some of the suggestions they make we've looked at many times. And some of the things such as the consolidation have been, both our military and the Japanese have big problems with. So I think we'll continue on the path we're on, we'll see where we are at the 2-plus-2 and then together with the Japanese will decide on the next steps forward.

In terms of the Chinese leadership and the military, I've never believed that the PLA was not responsive to the Chinese leadership. What I perceived was that on a day to day basis, they didn't go out of their way to keep the political leadership informed of what they were doing. I have used these examples before, I think the J20 test was one, and I will tell you that everything I have seen since then reinforces my belief then that the leadership was not aware that plane was going to be tested. But it's also been things the (inaudible) tests, the kind of day to day things that seemed to catch the political leadership by surprise. But my impression is that President Hu and leadership has made clear that they want this relationship with the United States to move in a particular direction. And I think that the PLA has been responsible for that.

Q. Is there anything that you think you can learn from this trip that would plug into the decision on the pace and the conditions for a drawdown? And there were—have been press reports about whether funding should play a role in that decision. Do you think that's an appropriate variable to discuss when talking about the drawdown plans for this summer and beyond?

Secretary Gates. I think that once you've committed, that success of the mission should override everything else, because the most costly thing of all would be to fail.

Now that does not preclude adjustments in the mission or in the strategy. But ultimately the objective has to be success in the mission that has been set forth by the president.

And so I guess that answers that question.

Q. Could I ask just a little bit—

Secretary Gates. (Inaudible)—it's always helpful to go into these discussions with the latest information from the field and some feeling of the ground truth in terms of how things are going. So that will obviously be helpful.

Secretary Hillary Clinton and Secretary Albert del Rosario delivered these remarks in Washington, DC

Secretary Clinton. Good afternoon, everyone. It is a pleasure to welcome back to Washington the foreign secretary. This may be his first visit as foreign secretary, but he is no stranger either to Washington or to the United States Government, having served with distinction as ambassador. But this gives us the opportunity to reaffirm the deep bonds between our two nations and our peoples.

The Philippines and the United States are longstanding allies, and we are committed to honoring our mutual obligations. This year, we are celebrating the 60^th anniversary of the U.S.-Philippines Mutual Defense Treaty, which continues to serve as a pillar of our relationship and a source of stability in the region. Whether we are working together to combat extremism, help victims of natural disaster, or stand up for human rights, the people of our countries share a vision of a better world and a mutual desire to take action.

So as we reflect on the 60^th anniversary of this defense relationship, we are also looking forward as to how we will chart a new vision for this critical alliance.

We discussed a number of bilateral issues in our Bilateral Strategic Dialogue, which brings together representatives of our defense and diplomatic communities to work towards solving common problems that affect us both.

The United States and the Philippines consult on a broad range of security issues, including counterterrorism and maritime security. For example, the United States recently transferred a U.S. Coast Guard cutter to the Philippine navy and helped the Philippines establish a coastal radar system so it can monitor its own waters more closely.

We also discussed the Philippines outstanding efforts to reduce poverty and fight corruption under President Aquino. Through our $434 million Millennium Challenge Compact, which I had the opportunity to announce alongside President Aquino in New York last year, we are working to reduce poverty and spark economic growth.

And the Philippines is only one of four countries in the entire world invited to participate in the Partnership for Growth, which will bring together experts to identify the biggest barriers to economic growth and find ways to overcome them.

The Philippines is also playing a high-profile role in the Open Government Partnership, which is a priority of President Obama's to improve governance and transparency.

We discussed a wide range of regional and global issues, including the Philippines leadership in the Asia Pacific region. The Obama Administration is committed to enhancing our engagement in this region, and I thank the foreign secretary for the Philippines staunch support for our efforts to elevate our engagement with ASEAN and join the East Asia Summit.

The Philippines is an important regional partner on issues such as human rights, political and economic reform, and we closely consult on the issue in Burma.

We also discussed recent events in the South China Sea. We are concerned that recent incidents in the South China Sea could undermine peace and stability in the region. We urge all sides to exercise self-restraint, and we will continue to consult closely with all countries involved, including our treaty ally, the Philippines.

As I have said many times before, the United States has a national interest in freedom of navigation, respect for international law, and unimpeded, lawful commerce in the South China Sea. We share these interests not only with ASEAN members but with other maritime nations in the broader international community. The United States does not take sides on territorial disputes over land features in the South China Sea, but we oppose the use of force or the threat of force to advance the claims of any party.

We support resolving disputes through a collaborative diplomatic presence and process without coercion. We believe governments should pursue their territorial claims and the accompanying rights to maritime space in accordance with customary international law, as reflected also in the Law of the Sea Convention. The United States supports the 2002 ASEAN China Declaration on the Conduct of Parties in the South China Sea, and we encourage the parties to reach agreement on a full code of conduct. We look forward to having discussions on these issues at the upcoming ASEAN Regional Forum in July.

So again, Secretary, thank you for a very productive conversation. I look forward to seeing you next month at the ASEAN Regional Forum.

Secretary Del Rosario. Thank you, Madam Secretary. It is a privilege for me to return to Washington, D.C. once again in the service of my country and our people. The United States remains the Philippines's most important strategic partner, and I welcome the opportunity to discuss with Secretary Clinton new ways to strengthen our longstanding alliance.

We discussed our partnership in initiatives that promote economic growth and the establishment of strong democratic institutions such as the Millennium Challenge Account, the Partnership for Growth, and the Open Government Initiative. We also discussed ways to strengthen the level of trade and investment between the U.S. and the Philippines. We discussed the Save Our Industries Act, which has been reintroduced in the Senate by Senator Inouye. We also spoke of our common efforts to combat terrorism and other forms of transnational issues such as trafficking in persons.

Secretary Clinton welcomed the Philippine Government's progress in anti-trafficking and assured that we will be taken into account in the next review. We agreed that a strong alliance between the Philippines and the U.S., anchored firmly on shared democratic ideals and vision, contributes significantly to the maintenance of the peace and stability of the Asia-Pacific region. I conveyed to Secretary Clinton the firm intent of the Philippine Government, under the leadership of President Aquino, to play a very active part in maintaining the security of the region.

As I have mentioned in my various meetings around Washington, D.C. and again to Secretary Clinton this afternoon, that while we are a small country, we are prepared to do what is necessary to stand up to any aggressive action in our backyard. The Philippines has made clear its position on the issue: to maintain peace while allowing for the economic development of the area. There is need to segregate the non-disputed areas from the disputed areas. What is ours is ours, and what is disputed can be shared.

I have discussed with Secretary Clinton our proposal for a rules-based regime in accordance with the UN Convention on the Law of the Sea. We adhere to the Declaration on the Conduct of Parties in the South China Sea and are working towards the eventual adoption of a code of conduct. This begins with using all diplomatic channels available to manage the tensions in the area. We have used the existing diplomatic channels to register our concern over China's aggressive action. We have also put on the table a framework for transforming the area and establishing a zone of peace, friendship, and cooperation.

At the same time, we have committed our own resources towards the development of the necessary capabilities to protect our national borders and ensure freedom of navigation and the unimpeded flow of commerce. We thus welcome the assurance from Secretary Clinton of the U.S. commitment to honor their treaty obligations as well their continuing interest in ensuring freedom of navigation, open access to Asia's maritime sea lanes, and respect for international law in the South China Sea. I look forward to continuing discussions on concrete programs that we can undertake in pursuit of the shared objectives.

The partnership between the Philippines and the United States is also manifest in our multilateral engagements. We welcome President Obama's participation at the East Asia Summit in Bali later this year. I would like to thank Secretary Clinton for welcoming me back to Washington and for her steadfast assurance that the partnership between the Philippines and the U.S. remains important to the United States and to the overall U.S. engagement in the Asia Pacific region.

Secretary Clinton. Thank you very much.

Q. Thank you. Secretary Clinton, on the South China Sea, how concerned are you about China's recent aggressive actions against Vietnamese and Philippine vessels off their coasts? And do you regard this as a serious threat to regional stability? And also, what is your response to comments from a senior Chinese official earlier this week, saying that the U.S. really had no role to play in helping resolve these disputes?

And also, Secretary del Rosario, if you could address your concerns about China's recent actions.

Secretary Clinton. Our position on the South China Sea has been consistent and clear. We support a collaborative diplomatic process by all claimants to resolve their disputes without the use or threat of force. We're troubled by the recent incidents in the South China Sea that have increased tensions and raised concerns about the peace and security of the region.

These reported incidents clearly present significant maritime security issues, including the freedom of navigation, respect for international law, and the lawful, unimpeded economic development and commerce that all nations are entitled to pursue. We support the ASEAN China declaration on the conduct of parties in the South China Sea. And as the secretary said, we encourage the parties to reach a full code of conduct.

And as I've said, we don't, as the United States, take a position on competing sovereignty claims over land features. And as the secretary said, there is customary international law; there is the law of the seas. What is theirs is theirs and then what is disputed should be resolved peacefully. However, if there are claimants to land or sea features, then they should respect the international law and do everything we can to try to resolve these disputes because, ultimately, territorial disputes have to be resolved by the claimants. But the United States is prepared to support the initiatives led by ASEAN and work with the South China Sea's claimants to meet their concerns.

And I would just conclude by saying that we are aware of the comments that were recently made by a high-level Chinese official. Assistant Secretary Kurt Campbell will be leading the American side in the first Asia Pacific consultation at a high level between the United States and China in Hawaii over the weekend, and this will be certainly one of the most important issues on the agenda.

Secretary Del Rosario. On the West Philippine Sea, otherwise known as the South China Sea, we, of course, are concerned about the aggressive intrusions being made by Chinese vessels. And in the last couple of months, since February 25^th, we actually have noted as many as nine intrusions of different varieties, but clearly becoming more aggressive and more frequent. We have, of course, responded to these intrusions in terms of filing diplomatic protests. And we have gotten a response which is, in our view, not acceptable. These are responses that— where the—where China is claiming that the South China Sea is totally within their sovereignty under the 9-line concept that they are submitting to the international community.

We, of course, are very concerned about where the direction of these events may be headed. And we have—the Philippine Government has come out with a position that we would like to call attention to everyone that the South China Sea, there should be a rules-based regime that should be put in force there so that international law will have to prevail. And in particular, when you—we say international law, we're referring to the UNCLOS, or the United Nations Convention on the Law of the Sea. We are asking China to please abide by this and we, of course, are hoping that the issue can be resolved diplomatically and in accordance with international law.

Q. Good afternoon, Madam Secretary, Secretary del Rosario. From ABSCBN. The Spratly issue is what preoccupies many Filipinos right now as far as foreign affairs is concerned. And one question that keeps cropping up is: What will America do if China attacks Filipino forces in the Spratly Islands? And in this light, the armed forces of the Philippines is shifting. There's an apparent shift from international security to external defense. And do—this is a question for Madam Secretary. If you think the Visiting Forces Agreement between the U.S. and the Philippines should be reviewed to reflect the current realities in the region. Thank you.

Secretary Clinton. Well, as to your first question, the United States honors our Mutual Defense Treaty and our strategic alliance with the Philippines. I'm not going to discuss hypothetical events, but I want to underscore our commitment to the defense of the Philippines. And with respect to our military cooperation, I think you have to view it on several levels at once.

We are in discussions with the Government of the Philippines about what their needs are because it is up to them to decide how to deploy forces and what their highest priorities are, and I will let the secretary respond to that. But we certainly wish to do what we can to support the Philippines in their desires for external support for maritime defense and the other issues that we have discussed and that the secretary is discussing in other meetings as well. There will be an upcoming U.S.-Philippines joint naval exercise starting on June 28^th. It is one of the routine cooperative training exercises that we conduct with the Philippine navy, and it is one more example of our close relationship.

With respect to the VFA, we don't, at this time, see any need for renegotiating, but we want to evaluate, we want to be sure that we are responsive to the needs that the Philippines have, and we have agreed to do that with the secretary.

Q. Madam Secretary, good afternoon. The armed forces of the Philippines needs, for once, or six, modern but affordable—and the operative word here is affordable—military hardware from the U.S. so you can have a credible response against external threats at home and the South China Sea. Do you support this, Madam, and can you give us your thoughts on the matter? Thank you.

Secretary Clinton. Yes, we do support that and we are starting a process with the foreign secretary and the Government of the Philippines to review the existing programs and to determine what are the additional assets that the Philippines needs and how we can best provide those. There are a number of different approaches. I know that the Secretary will be meeting later with Secretary Gates and Defense Department officials. So we will closely coordinate inside the United States Government with the Government of the Philippines. We are determined and committed to supporting the defense of the Philippines, and that means trying to find ways of providing affordable material and equipment that will assist the Philippine military to take the steps necessary to defend itself.

Secretary Hillary Clinton and Minister Kim Sung–Hwan delivered these remarks in Washington, DC