The importance and multifaceted nature of the U.S.-China economicrelationship call for an overarching institutional mechanism, such as the Strategic Economic Dialogue (SED). China's market reformsstopped about three years ago. American engagement that presumesongoing market reform in China is flawed. It must focus on a narrowrange of meaningful reform that is feasible in the current context.
The year 2008 marked the 30th anniversary of the beginning of market reforms in China and perhaps the third anniversary of their ending. Since the present Chinese leadership took power, market-oriented liberalization has been minor. And as such policies have wound down, they have been supplanted by renewed state intervention: price controls, the reversal of privatization, the rollback of measures encouraging competition, and new barriers to investment.