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The China-US Strategic Economic Dialogue sets a salutary example for how the world's major economies can deepen mutual understanding and better interaction through high-profile talks and negotiations.

Chinese Vice-Premier Wu Yi and visiting US Treasury Secretary Henry Paulson jointly announced the dialogue's establishment on Wednesday in Beijing. Both sides agreed to send high-ranking officials to meet twice a year to review their economic relationship.

Such a mechanism is welcome not only because it will benefit the two countries by smoothing bilateral economic ties, it will also contribute to world economic development by enhancing global economic stability and security.

In an era of accelerated globalization, every country is confronted with opportunities and challenges that are both unique in themselves and universal around the globe.

Hence, when responding, one should not look only inward for solutions. Policy co-ordination across borders is necessary to address economic concerns shared by the international community.

As two of the major growth engines for the world economy, China and the United States exert significant influence on the global market.

On one hand, as China rises rapidly as a world manufacturing center, the country's growing demand for energy and commodities has understandably raised concerns from the outside.

Although all developing economies like China and India face the same problem, the external pressure put on China is definitely an issue no other country has keenly felt.

On the other hand, as the world's largest economy, the United States can affect global growth with its domestic policies more than any other country does.

How well the United States will fix its ballooning trade and budget deficits is crucial to the development of the world economy in the short term. And how swiftly the US economy can accommodate the rise of China as a major economic power will decisively shape the world economic landscape in the long run.

Obviously, there are already enough common issues on the table when officials from the two countries meet to talk. From bilateral trade disputes to global strategic economic issues like energy security, the two countries will only find a long list of tasks that demand their joint efforts to address.

It is believed that through close and constructive co-operation, the world's two major economies can end up with some effective solutions to economic issues that neither of them can fix alone.

More importantly, the dialogue provides a needed platform for each country to grasp the other's priorities. For instance, it was China's need to press ahead with its market-oriented reform under the constraints of domestic economic conditions that determined its current export-centered trade policy, not the other way around.

With such an understanding, it will be more likely that the two sides can work together to seek real solutions instead of allowing trade issues to be politicized.

(China Daily September 22, 2006)