US, China set to grapple with growth concerns
Wednesday, 3 December 2008
WASHINGTON, Dec 2 (AFP): The United States and China hold high level talks this week expected to be dominated by concerns whether China can maintain high growth rates at a time when global expansion has been dampened by financial turmoil.
The two powers will hold their twice-yearly "strategic economic dialogue" on December 4-5 in Beijing, the last under the administration of President George W Bush whose successor Barack Obama has not indicated whether the cabinet-level talks will continue under his watch.
Launched by Bush and Chinese President Hu Jintao two years ago, the dialogue will be led by US Treasury Secretary Henry Paulson and Chinese Vice Premier Wang Qishan, a key economic policy maker.
Wide ranging topics from economy to trade, and investment to environment will feature during the meeting but the unending financial turmoil and its impact on the two huge economies are expected to take center stage.
Of particular concern to the United States, which is reeling from financial chaos and recession, is whether China can maintain rapid growth and help keep the global economy afloat without disrupting Beijing's long term strategy of weaning away from largely export-led growth to one that is more consumption-driven, experts said.
"The biggest concern for the United States right now is that the Chinese not lose focus on their long term objective of rebalancing growth," said Easwar Prasad, the former chief of the China division at the International Monetary Fund (IMF).
As the global credit crisis begins to take hold in China, the second biggest economy in Asia may be about to experience its worst slowdown in recent memory, with the World Bank warning last week growth in 2009 could hit a nearly two decade low of 7.5 per cent.
The two powers will hold their twice-yearly "strategic economic dialogue" on December 4-5 in Beijing, the last under the administration of President George W Bush whose successor Barack Obama has not indicated whether the cabinet-level talks will continue under his watch.
Launched by Bush and Chinese President Hu Jintao two years ago, the dialogue will be led by US Treasury Secretary Henry Paulson and Chinese Vice Premier Wang Qishan, a key economic policy maker.
Wide ranging topics from economy to trade, and investment to environment will feature during the meeting but the unending financial turmoil and its impact on the two huge economies are expected to take center stage.
Of particular concern to the United States, which is reeling from financial chaos and recession, is whether China can maintain rapid growth and help keep the global economy afloat without disrupting Beijing's long term strategy of weaning away from largely export-led growth to one that is more consumption-driven, experts said.
"The biggest concern for the United States right now is that the Chinese not lose focus on their long term objective of rebalancing growth," said Easwar Prasad, the former chief of the China division at the International Monetary Fund (IMF).
As the global credit crisis begins to take hold in China, the second biggest economy in Asia may be about to experience its worst slowdown in recent memory, with the World Bank warning last week growth in 2009 could hit a nearly two decade low of 7.5 per cent.