"Although there may be no immediate, concrete results, the dialogue will serve as a platform for consultations between the two parties," said Mei Xinyu, an analyst with China's ministry of commerce.

"Neither side would like disputes to spin out of control, but prefer to aim for more rational, responsible and efficient consultations."

Meeting twice a year in the US and Chinese capitals, Paulson and Vice Premier Wu Yi will lead policymakers, including their presidents, in talks on longer-term issues.

An arrangement like this between the planet's largest developed and developing economies is long overdue in an ever more globalized world, Chinese state media have argued.

"The dialogue provides a needed platform for each country to grasp the other's priorities," the official China Daily said in an editorial.

"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," it said.

That may be difficult, since the top agenda item -- the value of the Chinese currency, the yuan -- has long since become a political issue in Washington.

Many US lawmakers argue that it is undervalued by as much as 40 percent against the dollar, giving an artificial boost to Chinese exports at the cost of millions of American factory jobs.

Without meaningful currency reform, the US Senate could well hold a vote this month on a bill that would slap a punitive tariff of 27.5 percent on all of China's US-bound goods.

This step could be increasingly difficult to avoid, but for the longer term, observers in Beijing hope that merely meeting on a more regular basis will remind the Americans that trade with China is not intrinsically bad.

"China hopes to use this dialogue to induce the Americans to maintain a basically positive attitude towards trade with China," said Xia Yeliang, an economist with Peking University.

"China is keen to persuade the Americans not to put up obstacles to Chinese exports despite their trade deficit."

That may be an important psychological gain, but observers argued talk alone is not enough to ensure the smooth operation of what is called the most important bilateral trade relationship in the world.

In fact, both Secretary Paulson and his Chinese counterparts know exactly what to do to counteract imbalances that affect not just the bilateral relationship, but the global economy as a whole.

"The US needs to save more and China needs to spend more," said Richard Bush, a Northeast Asia specialist at Washington's Brookings Institution. "But those steps require a lot of political will which may be hard to summon."

Some observers sensed a certain deja vu, pointing out that former deputy secretary of state Robert Zoellick was in charge of another "strategic" dialogue with China on foreign policy issues.

John Tkacik, a long-serving US diplomat in China who is now a research fellow at the conservative Heritage Foundation in Washington, said Zoellick was unable to achieve much on any important issue from Darfur to Iran.

Now Zoellick is gone, but the Chinese line-up is basically intact. Which, some observers argued, may be part of the US problem.

"Beijing's top policy makers have been handling the American barbarians for decades (and) have been crossing swords with a steady succession of American negotiators for 20 years," Tkacik said. They're pro's, we're always fielding neophytes."

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