Geithner calls for closer ties with China from the Financial Times reports that Treasury Secretary on his first trip to China, is not surprisingly, calling at Peking University for closer ties with our banker, China. He also discussed reforms to both China and the United States' systems - China's currency manipulation and the US making fiscal reforms.
Full text of Geithner's speech
“A successful transition to a more balanced and stable global economy will require very substantial changes to economic policy and financial regulation around the world,” he told an audience at Peking University.“But some of the most important of those changes will have to come in China and the United States.”
The remarks set the tone for two days of talks with Chinese leaders. Mr Geithner said both China and the US needed to reform the way their two economies interacted.
“Our common challenge is to recognize that a more balanced and sustainable global recovery will require changes in the composition of growth in our two economies,” Mr Geithner said.
Addressing Chinese fears over the safety of its financial assets – mainly invested in US Treasury bills – Mr Geithner reiterated President Barack Obama’s pledge to lower the US fiscal deficit once the economy is on a stable recovery path. The deficit would be brought down to a level of around 3 per cent of GDP to allow the ratio of overall public debt to GDP to start falling, he added.
He also said savings rates in the US would have to increase, and consumer demand could not be as dominant a driver of growth as it had been in the past.
But Mr Geithner also named a long list of tasks he said the Chinese government had to address to make its contribution to a more balanced global economy, including expanding its social safety net, spending more on education and encouraging changes in industry structure through market mechanisms.
“An important part of this strategy is the government’s commitment to continue progress toward a more flexible exchange rate regime,” Mr Geithner said, adding that the issues mentioned would form the core of the bilateral agenda for economic cooperation.
Geithnew Says China, US Must Lead Economic Revivial (AP)
Treasury Secretary Timothy Geithner told lawmakers in China that the U.S. And China must be at the forefront of any economic recovery effort around the globe. (June 1)
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