In late May, Chinese vice-premier Wu Yi will travel to Washington for the latest round of the US-China Strategic Economic Dialogue, a forum established to discuss long-term economic issues, where she will meet with US Treasury secretary Henry Paulson. As the two countries prepare for the meeting, there seems to be no sign of an agreement on the pace of appreciation for the renminbi and US protectionism is on the rise.

Yet despite continued trade frictions, the meeting is an opportunity for a deal that would benefit both countries. China should undertake to open its securities and capital markets sector in a similar way to the opening of its insurance sector. In return, the US would undertake to curb trade protectionism against China, relax its export restrictions on high-technology products and refrain from pressuring China to appreciate the renminbi.