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Currency reforms dominate discussions at US-China Strategic Economic Dialogue

Wednesday 9 June 2010 - by Andrew Naylor

The United States and China committed to deepening economic cooperation between the two superpowers and to promoting a more balanced global economy at their second strategic and economic dialogue in Beijing held on 24-25 May.

Both powers recognise that neither can act unilaterally and that greater cooperation in the economic sphere is essential for the maintenance of global financial stability in the future.

While the US recognises it needs to do more to boost domestic savings and investment, analysts are also suggesting that China should do more to encourage endogenous growth and domestic consumption to stabilise the global financial system in the longer term.

At the S&ED, leaders of both countries acknowledged this and pledged to work towards more sustainable and balanced growth as the world emerges from the financial crisis.

Among the announcements made were that, as its economic rebound strengthens, China will safeguard the expanded role of consumption in driving its economic growth through pro-consumption fiscal and monetary measures and continued structural reforms.



As private demand in the United States recovers, the focus of US fiscal policy will shift from sustaining aggregate demand and supporting employment to reducing the medium-term federal deficit and ensuring long-term fiscal sustainability.

At the conclusion of the dialogue sessions, US Treasury Secretary Timothy Geithner said: “Our economic relationship is strong, and it will get stronger. It rests on the recognition by Presidents Hu and Obama that we have shared interests and shared responsibilities.

“Over the past year, we have acted together to help restore financial stability and economic growth to a world in crisis. Because we stood together, and because our Presidents were willing to act quickly and decisively, the world is in a much stronger position to successfully overcome the challenges ahead.”

This was echoed by Chinese Vice-Premier Wang Qishan who said that the recent financial crisis had led to greater cooperation between the two countries: “With increasingly close links, our two economies have become inseparable. This has been particularly true since the outbreak of the international financial crisis, and our two countries have acted together to meet the challenge.”


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