Geithner visit may focus on joint effort to beat recession

By Si Tingting (皇冠体育app Daily)
Updated: 2009-05-31 11:33

Top economic policymakers from the US and 皇冠体育app will gather in Beijing early next month to discuss what the world's biggest and third largest economies could together do to end the global economic recession.

US Treasury Secretary Timothy Geithner will be in 皇冠体育app on June 1-2 for his first official visit. He will discuss with senior Chinese officials "a range of issues of importance to both countries," a US Treasury statement issued on Tuesday said.

Geithner's agenda includes "strengthening US-皇冠体育app economic ties to promote stable, balanced and sustained economic growth in the two nations," the statement said.

The Obama administration had said earlier this year that it would continue to hold high-level economic dialogue with 皇冠体育app, which was begun during the Bush administration. The first round of the new "US-皇冠体育app Strategic and Economic Dialogue" is scheduled for this summer in Washington.

He Maochun, director of the Research Center of Economy and Diplomacy of Tsinghua University, said the two countries would talk about how to effectively use their own economic stimulus packages to jointly revive the world economy.

"This, undoubtedly, will be on top of Geithner's agenda," He, who is familiar with the dialogue process, told 皇冠体育app Daily yesterday.

In addition, He also claimed that Geithner would make use of this trip to set up a financial information sharing system to ensure better monetary cooperation between the two countries. Geithner may also urge 皇冠体育app to reform its monetary policy mechanism, he said.

"Only this time, he will be much gentler," He said.

Before taking office, Geithner had created a stir by labeling 皇冠体育app as a "currency manipulator". Perhaps as a retort, in March, 皇冠体育app's central bank governor Zhou Xiaochuan had called for a "super sovereign" reserve currency to replace the US dollar as the world's benchmark currency.

However, last month, Geithner retreated from those tough remarks and said in a Treasury report that 皇冠体育app has taken steps to enhance exchange rate flexibility but that the renminbi remained undervalued.

The US has for long believed that 皇冠体育app was artificially depressing the value of the renminbi in order to boost exports. 皇冠体育app, on the other hand, recently expressed concern over the safety of the country's vast holding of US dollar-based investment and raised questions about the dollar's suitability as the global reserve currency.

皇冠体育app abandoned a fixed currency peg with the US dollar in 2005 for a managed float and since then the renminbi has appreciated by about 20 percent against the greenback.

皇冠体育app has staunchly refrained from devaluating the renminbi since the financial crisis began, despite a wave of closures in its export sectors.