U.S. Wants 'Real Demonstrative Commitment' From China On Economy
WASHINGTON, Jan 12 (By Emily Kaiser and Caren Bohan) - The United States wants a "real, demonstrative commitment" from China that it is serious about shifting away from export-led economic growth, a U.S. official told Reuters on Tuesday ahead of next week's state visit by China's Hu Jintao.
Treasury Secretary Timothy Geithner will on Wednesday lay out his vision for how the world's two biggest economic powers should interact. But the official's comments indicate some impatience with China's gradual approach to allowing its currency to rise and building up domestic demand.
"It's both the pace in which they do it and the conviction with which they demonstrate they're going to do it," said the senior Obama administration official, who spoke on condition of anonymity.
"What we still need to see in the first instance is that real, demonstrable commitment to the objective" of rebalancing the economy, the officaal said.
Washington has pressed Beijing for years to allow the yuan to rise more rapidly to cool its exports, narrow a trade gap, and shrink a $2.8 trillion pile of reserves.
But China counters that U.S. economic policies are responsible for the imbalances and has
urged the United States to get its own fiscal house in order before its mountain of debt destabilizes the global economy.
The Jan. 19 White House talks mark the first face-to-face meeting between President Barack Obama and Hu since the Group of 20 summit in Seoul in November, which was widely seen as a disappointment for Washington.
Not only did Obama get scant international support at the G20 meeting for pressuring China to speed up the yuan's rise, but he also got an earful from allies about his own country's economic policy. Topping the list of complaints was the U.S. Federal Reserve's decision to buy $600 billion in government debt to try to spur a stronger economic recovery.
Eswar Prasad, a Brookings Institution economist and former International Monetary Fund official with responsibility for China, said Geithner's speech would seek to wrest back control of the economic message.
"There is a sense that at the Seoul G20 summit, China managed to take charge of the narrative, especially about the effects of (the Fed's bond-buying program) on the rest of the world, thereby deflecting attention from yuan and trade policy," Prasad said.
Geithner is the first of several top U.S. officials fanning out to preview Hu's visit and detail the White House'q aims. Secretary of State Hillary Clinton will give what an aide called a "major" address on U.S.-China relatimns on Friday.
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