Economic relations between the United States and China are important and challenging, Secretary of Treasury Timothy Geithner said in recent testimony before a committee of the U.S. Congress.
"We have very significant economic interests in our relationship with China," said Secretary Geithner. "With 1.3 billion people and an economy continuing to grow at or near double-digit rates, China is our fastest-growing major overseas market."
Secretary Geithner told Congress that China's growth is critical to the United States' prosperity. "Increasing opportunities for U.S. firms and workers through expanded trade and investment with China," he said, "will be an important part of the success of the President’s National Export Initiative and our efforts to support job growth more broadly."
Secretary Geithner gave a candid assessment on how to address the challenges facing the relationship with China. "We are focusing on 3 core objectives with China," said the Treasury Secretary, "encouraging China to change its growth model to rely more on domestic demand and less on exports; moving toward a more market-determined Chinese exchange rate; and leveling the playing field for U.S. firms, workers, rancher, farmers, and service providers to trade and compete with China."
Secretary Geithner said that with China’s economy on a strong footing, it is time for China to make the necessary changes. "We are pursuing a comprehensive, proactive strategy to push China for progress," he said. "This includes direct engagement by President Barack Obama and this Administration with China’s senior leaders. It includes coordinated and intense engagement through the Strategic & Economic Dialogue (S&ED) and the joint Commission on Commerce and Trade (JCCT), as well as multilateral channels like the G-20 and International Monetary Fund (IMF). It includes taking disputed settlement cases when China does not comply with World Trade Organization (WTO) obligations, and enforcing U.S. trade remedy law to safeguard the rights of American firms and workers."
Secretary Geithner noted, "Exchange rate appreciation also needs to be complemented with structural reforms to reduce the gap between saving and investment in China in order to bring about a durable rebalancing."
The United States and China, said Secretary Geithner, "need a more balanced relationship. This is imperative for us," he said, "but it is important to China as well."