The Second China-US Strategic and Economic Dialogue (S&ED) starting May 24 in Beijing comes at a time when the international community is reviewing premature optimism regarding a global recovery.

If the first round of the S&ED last July was chiefly about coordinating bilateral and international efforts to arrest the global recession in the wake of the financial crisis, the current one provides a unique opportunity to talk about reforms vital to both sides as well as the international community.

The worst global downturn in decades has laid bare loopholes in the global financial and economic system. The severity of the crisis has curtailed much-needed reform by policymakers across the globe.

In retrospect, it has become evident that regulatory loopholes in developed countries' financial markets led to the proliferation of toxic financial derivatives, exacerbating the crisis.

In the absence of genuine attempts to fix the matter, some Western observers have pointed to the Chinese currency as the root cause of the trouble.

This is the key reason why they are hoping the renminbi issue will figure in the current discussions.

Yet, the passage of a sweeping financial reform bill by the US Senate right before the second S&ED and the recent debt crisis in Europe, is a huge blow to those trying to deny the need for critical reform.

As the world's largest economy, the US endeavor to plug regulatory loopholes in its financial markets will certainly drive similar global reforms.

As the fastest-growing major economy, China also has a huge stake in the health of the global financial and economic system.

If both can build on the momentum of financial reform the United States has initiated, they may make the S&ED a key platform for a wide range of reforms including financial regulation and climate change.