US-China meeting deepens financial ties but fails to find solution to global aluminium surplus

China has, for the first time, included the United States in a government scheme allowing American banks to clear renminbi-denominated transactions - in one of the few positive outcomes of the two sides' high-level dialogue that failed to narrow their differences over certain other issues like the South China Sea disputes that are of high strategic significance.

China will grant the United States a 250 billion yuan (S$52 billion) quota under its Renminbi Qualified Foreign Institutional Investment (RQFII), significantly expanding the programme that stood at 501.77 billion yuan last month.

The move makes the US the second-largest quota holder, behind Hong Kong with 270 billion yuan.

The other countries involved in the scheme include Singapore, which joined the programme in 2013 and got its original 50 billion yuan quota doubled last November. Britain and France each has an 80 billion yuan quota.

The RQFII scheme, launched in 2011, allows financial institutions to buy securities such as stocks and bonds in mainland China and is part of Beijing's efforts to internationalise the yuan.

"The ability to do renminbi transactions will be a real advantage to small firms in particular. It opens an important door to the renminbi market," said US Treasury Secretary Jacob Lew at a media briefing last evening.

Another positive outcome of the two-day Strategic and Economic Dialogue, an annual meeting, was in the proposed Bilateral Investment Treaty (BIT), with China promising to provide a new negative list to the US next week.

Beijing has also agreed to cut its excess steel production that has hurt American industries and jobs. But the two sides were not able to agree on how to deal with excess global aluminium capacity.