On the sidelines of the G20 Financial Summit in London, the United Kingdom, US and China agreed to to establish the “U.S.-China Strategic and Economic Dialogue.” U.S. Secretary of State Hillary Clinton and Chinese State Councilor Dai Bingguo will chair the “Strategic Track” and U.S. Secretary of the Treasury Timothy Geithner and Chinese Vice Premier Wang Qishan will chair the “Economic Track” of the Dialogue, each as special representatives of their respective presidents. They will hold the first round of the dialogue in Washington DC this summer.

The two sides agreed to further deepen cooperation in a wide range of areas, including economy and trade, counterterrorism, law enforcement, science and technology, education, culture and health. They also agreed to resume and expand consultations on non-proliferation and other international security topics. They welcomed further exchanges between the national legislatures, local authorities, academics, young people and other sectors. The two sides agreed to resume the human rights dialogue as soon as possible.

The two sides agreed that Admiral Gary Roughead, U.S Chief of Naval Operations, will visit China upon invitation in April to attend events marking the 60th anniversary of the founding of the Navy of the Chinese People’s Liberation Army.

The two sides agreed to maintain close communication and coordination and to work together for the settlement of conflicts and reduction of tensions that contribute to global and regional instability, including the denuclearization of the Korean Peninsula, the Iranian nuclear issue, Sudan humanitarian issues, and the situation in South Asia.

Obama underscored that once recovery is firmly established, the United States will act to cut the U.S. fiscal deficit in half and bring the deficit down to a level that is sustainable. Hu emphasized China’s commitment to strengthen and improve macroeconomic control and expand domestic demand, particularly consumer demand, to ensure sustainable growth, and ensure steady and relatively fast economic development.

They agreed the international financial institutions should have more resources to help emerging market and developing nations withstand the shortfall in capital. They agreed on sweeping changes in the governance structure of international financial institutions.

Hu and Obama discussed regulatory and supervisory changes needed to reform and strengthen the global financial system, including regulatory standards. U.S. has recently announced a comprehensive financial regulatory reform agenda.