Obama in China to Address Trade Issues

July 27, 2009
President meeting with Chinese leaders to discuss relations between the two economic powers

The United States appealed on July 27 for far-reaching cooperation with China to combat the global economic crisis ahead of the most in-depth talks between the two sides since President Obama's election.

Both sides have indicated that long-standing trade and currency frictions will figure prominently in the discussions.

The massive U.S. trade deficit with China, Washington's second-largest trading partner, swelled to an all-time high of $266.3 billion in 2008 and keeps growing.

U.S. critics accuse Beijing of keeping its yuan currency artificially low to gain a trade advantage and protect its crucial export sector.

Obama was set to inaugurate the two-day dialogue, part of his push to build a broader relationship between the biggest developed and developing economies.

With China increasingly uneasy about its massive exposure to the U.S. economy, Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner made a joint appeal to Beijing to work together to spur global growth.

"Simply put, few global problems can be solved by the U.S. or China alone. And few can be solved without the U.S. and China together," Geithner and Clinton wrote in an article published July 27 in The Wall Street Journal.

The duo, who will lead the United States side in the talks, argued that measures by Washington and Beijing to create and save jobs helped the world at large weather its worst economic turmoil since the Great Depression.

"The success of the world's major economies in blunting the force of the global recession and setting the stage for recovery is due in substantial measure to the bold steps our two nations have taken," they said. "As we move toward recovery, we must take additional steps to lay the foundation for balanced and sustainable growth in the years to come."

No major announcements were expected in the Washington talks but a flurry of press briefings could shed some light on the sometimes fraught relationship of the two intertwined goliaths.

China is the largest creditor to the United States and has voiced growing concern about the fragility of the dollar and the safety of its more than $750 billion invested in U.S. Treasury bonds.

Zhu Guangyao, assistant finance minister, told reporters in Beijing that China would press the United States to ensure the safety of its investments.

"As an important investor, China is deeply concerned about the U.S. economic situation and hopes the U.S. stimulus policy could make effective progress," Zhu said.

Copyright Agence France-Presse, 2009

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