There's little doubt about which country America's leaders need to placate during this economic crisis. Geithner is going to try to instill confidence about China's further backing of the US debt. China is going to want assurances that the US has a plan to get its economy back on track. China needs the US to get out of its current funk.
Image from Salon
WASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner will visit Beijing next month for two days of meetings with top Chinese officials aimed at strengthening the economic relationship between the United States and China, the Treasury Department said on Tuesday.
Geithner is due to meet top Chinese economic policymakers on June 1-2 "to discuss a range of issues of importance to both countries, including strengthening U.S.-China economic ties to promote stable, balanced and sustained economic growth in the two nations," the Treasury Department said in a statement.
The trip is Geithner's first to China since taking office.Read On
WASHINGTON (AFP) — China may not be able to sustain its economic expansion in 2010 if there is no recovery particularly in the United States and Europe, a senior World Bank official said Tuesday.Now that stimulus packages have rendered the governments of the world the driving forces in the global economy, I hope that China, the US, and the other countries' leaders navigate us well through this mess. But based on how bailouts and other measures have gone so far, I'm not sure that there should be too much optimism for this to happen smoothly and efficiently.
China posted growth of 6.1 percent in the first quarter of 2009, down from 6.8 percent in the final three months of 2008, underlining the impact the global crisis is having on the world's third-biggest economy.
"I think the key concern is if the rest of the world begins to recover, in particular Europe and the US, China's exports market returns, then there is a high probability that we get higher growth rates next year -- that is the key determinant," said Jim Adams, World Bank's Vice-President for East Asia and Pacific region....
If there is no recovery in the United States and Europe, which are top export markets for China, Beijing has to provide domestic stimulus to fuel growth in the world's most populous nation, he said.
If the United States, for example, grew at a pace of three percent next year as projected by the government, "then I think we will be quite confident China will be able to increase its growth rate next year.
"If not, China has to rely on domestic stimulus," he added.
"The ability of the government to sustain 6.5 percent (growth) is heavily within the control of the government because the government has the fiscal resources to provide the stimulus," Adams said.Read On