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Xi, Obama take stroll in Zhongnanhai

Chinese President Xi Jinping, second right, and US President Barack Obama talks while walking together at Zhongnanhai leaders compound before their private dinner, Tuesday, Nov. 11, 2014 in Beijing. Photo: AP

Chinese President Xi Jinping and US President Barack Obama took a relaxed stroll in Zhongnanhai Tuesday night, their first one-on-one encounter during Obama's visit to Beijing.

The stroll after the APEC Economic Leaders' Meeting was followed by a brief meeting and dinner, and gave rise to expectations that the unusually informal atmosphere would help the two leaders tackle high stakes issues at a formal meeting on Wednesday.

For many observers, the Zhongnanhai meeting called to mind the informal meeting between the two leaders at the Sunnylands estate in California in June 2013.

While briefing Obama on the history of Zhongnanhai, Xi said it is important to learn about China's modern history in order to understand the Chinese people's current aspirations and the path forward they have chosen.

During the Tuesday meeting, Obama reportedly struck a positive note despite tensions in the Sino-US relationship caused by issues ranging from cybersecurity to maritime disputes in the South China Sea.

"When the US and China are able to work together effectively, the whole world benefits," he was quoted as saying by Reuters. Obama also added he wanted to "take the relationship to a new level."

Earlier on Tuesday, Ben Rhodes, a US deputy national security adviser, said the US will be "very clear" with China if it veers beyond the bounds of international norms on cybersecurity and other issues.

"There's no mystery in our position on these issues, there's no mystery on the Chinese position," said Rhodes. "When there's an opening, we take it, and we run through that opening, we work together. And when there's a difference, we're just going to keep raising it repeatedly with China."

Despite points of tension, in a sign that they can work together, China and the US reached a breakthrough agreement on expanding the tariff-cutting Information Technology Agreement (ITA) covering more than 200 information technology products, a move which could affect $1 trillion in trade.

Obama said it was APEC's work that led to the ITA, for which an expansion is now being negotiated.

"So it is fitting that we are here with our APEC colleagues to share the news that the United States and China have reached an understanding that we hope will contribute to a rapid conclusion of the broader negotiations in Geneva," Obama said.

The deal would allow the "swift conclusion" on talks to enlarge the ITA at the WTO meeting in Geneva later this year.

Michael Froman, the US trade representative, said this is encouraging news for US companies that are keen to see global tariffs further cut on products such as medical equipment, GPS devices, video game consoles and next generation semiconductors.

Zha Xiaogang, a research fellow at the Shanghai Institute for International Studies, told the Global Times that the deal will not give a significant boost to Chinese trade, but will bring long-term benefits to both countries in the form of increased exports for the US and swifter technological development in China.

"When the tariffs are removed, R&D for many technology companies in China will be put under pressure due to an increase in market competitiveness. They will need to work harder to come up with better products to compete with those of foreign companies. In other words, the deal will promote research in information technology," he said.

Zha also pointed out that the trade pact is a strategy to further stabilize the Sino-US relationship as the two countries have now become increasingly interdependent.

Xi and Obama are scheduled to hold a second round of talks at the Great Hall of the People in Beijing on Wednesday.

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