China-US economic talks kick off
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President Obama said the relationship between the US and China would shape the 21st century and said the two shared a "mutual interest".
China has sent Vice Premier Wang Qishan and State Councillor Dai Bingguo.
The meeting, called the US-China Strategic and Economic Dialogue, is the first formal negotiation between the US and China since Mr Obama took office.
‘Strong coordination’
The talks will cover a range of issues, including halting the spread of nuclear weapons in North Korea and Iran, and creating clean and secure energy sources.
But the main focus will be on working towards economic recovery.
"The current crisis has made it clear that the choices made within our borders reverberate across the global economy – and this is true not just of New York and Seattle, but Shanghai and Shenzhen as well," President Obama said at the start of the meeting.
"That is why we must remain committed to strong bilateral and multilateral coordination."
Vice Premier Wang also said it was a "critical moment" for the world economy as it moves out of crisis and towards recovery.
Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton co-host the talks.
Manufacturing competition
At the meeting, the US will push China to rely less on exports and to focus on encouraging its domestic market.
US manufacturers complain they cannot compete fairly with their Chinese competitors.
Some accuse Beijing of deliberately devaluing its currency to make its exports seem cheaper.
But China is unlikely to concede any ground on this point, says the BBC’s Chris Hogg in Shanghai.
GDP growth might be picking up but the country’s exporters are still struggling, he says.
‘No illusion’
China, meanwhile, is worried about the value of the US dollar. It holds huge amounts of US debt – more than $800bn (£486bn) of US Treasury securities alone.
It fears President Obama’s stimulus spending will stoke inflation in the United States, eroding the value of the dollar and making the US debt China holds worth a lot less.
At these talks the US Treasury Secretary Timothy Geithner will be seeking to soothe those fears.
He has already tried to reassure the Chinese their assets will be protected. But China is not convinced.
China and the US are well aware they need each other. Their economies are bound together tightly.
That does not mean they always agree when it comes to trade for example – far from it – but it does mean they accept the need to sort out problems in forums like this.
"I have no illusion that the US and China will agree on every issue," President Obama said.
"But that only makes dialogue even more important."
Source: BBC News
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Posted by Axxa News Team
on Jul 28 2009. Filed under Business.
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