Washington-China cooperation 'to help shape global economic recovery'
Wednesday, 29 July 2009
Merle David Kellerhals Jr.
TREASURY Secretary Tim Geithner says China and the United States are working together to help shape a global strategy to contain the current economic crisis and lay a foundation for a rapid recovery.
In a speech at Peking University last month, Geithner said the combined aggressive policy actions of China, the United States and other major economies have helped to slow the pace of economic deterioration, repair the financial system and improve confidence for the business sector.
"At the G20 leaders meeting in London in April, we agreed on an unprecedented program of coordinated policy actions to support growth, to stabilise and repair the financial system, to restore the flow of credit essential for trade and investment, to mobilise financial resources for emerging market economies through international financial institutions, and to keep markets open for trade and investment," Geithner said.
As a consequence of these recovery efforts, there are some initial signs of improvement, Geithner said. "The global recession seems to be losing force," he said. "In the United States, the pace of decline in economic activity has slowed."
In addition, the financial system is also beginning to heal, the US treasury secretary said, and the recent stress test of 19 major US banks helped improve market confidence in them, which helped the banks raise additional capital from private investors. And, he said, the security markets have begun to rebound.
"These are important signs of stability, and assurance that we will succeed in averting financial collapse and global deflation, but they represent only the first steps in laying the foundation for recovery," Geithner said. "The process of repair and adjustment is going to take time."
Geithner assured the audience that Chinese assets invested in US Treasury securities are safe and that the United States will begin working on its deficit after the economic recovery is certain. Some in China have expressed concern for the amount of Treasury securities held by the Chinese government, which is $768 billion as of March based on current data.
"In the United States, we are putting in place the foundations for restoring fiscal sustainability," Geithner said. "As we recover from this unprecedented crisis, we will cut our fiscal deficit, we will eliminate the extraordinary governmental support that we have put in place to overcome the crisis, we will continue to preserve the openness of our economy, and we will resolutely maintain the policy framework necessary for durable and lasting, sustained, non-inflationary growth."
Geithner said Chinese President Hu Jintao and President Obama agreed in April at the London financial summit to establish the Strategic and Economic Dialogue.
Geithner also announced that he is appointing David Loevinger as the department's executive secretary and senior coordinator for China affairs and the Strategic and Economic Dialogue. He announced that David Dollar will be the economic and financial emissary to China.
Loevinger now serves as Treasury's minister-counselor for financial affairs in China, responsible for engaging with his Chinese counterparts on such issues as financial regulation, monetary policy and exchange rate policy. Dollar, based in Beijing since 2004, now is the World Bank's country director for China and Mongolia. He will remain based in China, while Loevinger will be based in Washington.
Courtesy: Bureau of International Information Programs of the US Department of State
TREASURY Secretary Tim Geithner says China and the United States are working together to help shape a global strategy to contain the current economic crisis and lay a foundation for a rapid recovery.
In a speech at Peking University last month, Geithner said the combined aggressive policy actions of China, the United States and other major economies have helped to slow the pace of economic deterioration, repair the financial system and improve confidence for the business sector.
"At the G20 leaders meeting in London in April, we agreed on an unprecedented program of coordinated policy actions to support growth, to stabilise and repair the financial system, to restore the flow of credit essential for trade and investment, to mobilise financial resources for emerging market economies through international financial institutions, and to keep markets open for trade and investment," Geithner said.
As a consequence of these recovery efforts, there are some initial signs of improvement, Geithner said. "The global recession seems to be losing force," he said. "In the United States, the pace of decline in economic activity has slowed."
In addition, the financial system is also beginning to heal, the US treasury secretary said, and the recent stress test of 19 major US banks helped improve market confidence in them, which helped the banks raise additional capital from private investors. And, he said, the security markets have begun to rebound.
"These are important signs of stability, and assurance that we will succeed in averting financial collapse and global deflation, but they represent only the first steps in laying the foundation for recovery," Geithner said. "The process of repair and adjustment is going to take time."
Geithner assured the audience that Chinese assets invested in US Treasury securities are safe and that the United States will begin working on its deficit after the economic recovery is certain. Some in China have expressed concern for the amount of Treasury securities held by the Chinese government, which is $768 billion as of March based on current data.
"In the United States, we are putting in place the foundations for restoring fiscal sustainability," Geithner said. "As we recover from this unprecedented crisis, we will cut our fiscal deficit, we will eliminate the extraordinary governmental support that we have put in place to overcome the crisis, we will continue to preserve the openness of our economy, and we will resolutely maintain the policy framework necessary for durable and lasting, sustained, non-inflationary growth."
Geithner said Chinese President Hu Jintao and President Obama agreed in April at the London financial summit to establish the Strategic and Economic Dialogue.
Geithner also announced that he is appointing David Loevinger as the department's executive secretary and senior coordinator for China affairs and the Strategic and Economic Dialogue. He announced that David Dollar will be the economic and financial emissary to China.
Loevinger now serves as Treasury's minister-counselor for financial affairs in China, responsible for engaging with his Chinese counterparts on such issues as financial regulation, monetary policy and exchange rate policy. Dollar, based in Beijing since 2004, now is the World Bank's country director for China and Mongolia. He will remain based in China, while Loevinger will be based in Washington.
Courtesy: Bureau of International Information Programs of the US Department of State