A couple weeks ago, the New York Times Magazine ran an informative and interesting article on China and America's relationship going forward. The lede of the article talks a bit about Geithner and his ties to China.
Days ahead of U.S. Treasury Secretary Timothy Geithner's visit to China, Beijing has already shut the door for discussion on the appreciation of China's currency, the yuan, pledging it will keep the currency stable to help Chinese exporters.
In an executive meeting of the State Council presided by Premier Wen Jiabao, the leading comrades reiterated their determination in guarding the yuan. "We have to maintain the exchange rate basically stable at a reasonable and balanced level," an official statement declared after the Wednesday meeting.
The Chinese yuan has been hovering around 6.83 per U.S. dollar since the middle of 2008. Analysts said China has virtually repegged the yuan to that level. Over the past two years, the yuan has steadily risen against the dollar, as U.S. officials have been demanding. The Chinese currency surged 7.1% against the greenback last year after gaining 6.9% in 2007 and after rising 3.8% in 2006.
China's trading partners, especially the U.S., have been urging China to allow the currency to further appreciate to ease global trade imbalances. U.S. Treasury Secretary Timothy Geithner might put the topic on his agenda to discuss with Chinese officials in his trip to China from May 31 until June 2.
Yet, China regards the sharp fall in its exports as the biggest difficulty in keeping its economic on growth track. Because a stronger Yuan would crimp exports further, there is not much hope Geithner would find willingness from China to engineer a rise in its currency - particularly when Beijing blames excesses in the U.S. for the global financial crisis that has slowed Chinese growth.
On Timothy Geithner’s first day as a Dartmouth freshman, while he was walking across campus on his way to register for classes in the fall of 1979, he heard a man speaking Thai — swearing in Thai, to be precise — from a balcony. Geithner found this amusing, because only a couple of months before, he left his home in Thailand, where his father worked for the Ford Foundation, to move to Hanover, N.H. So he stopped to talk to the man, who turned out to be David Keenan, a Chinese teacher at Dartmouth. The two quickly realized that they had a lot in common; among other things they attended the same schools, about a decade apart, in Bangkok and Delhi. (The cause of Keenan’s swearing, alas, has been lost to history.) Having established a rapport, Keenan then decided to do a little salesmanship. He urged Geithner to take Chinese, the only Asian language that Dartmouth offered at the time.Geithner has a big week ahead of him. Placating the Chinese on the stability and viability of US dollars while at the same time trying to work on China and their currency, uhh, that "m-word," is going to be a tight-rope walk to say the least.
Geithner did, and found that he liked it. Learning another Asian language, he told me recently in his soaring office at the Treasury Department, “was a nice little piece of continuity for me.” He ended up majoring in government and Asian studies and taught basic Mandarin classes to make some money. After Dartmouth, he attended the School of Advanced International Studies at Johns Hopkins. He then spent three years at Kissinger Associates, working with Brent Scowcroft, the future national security adviser, and helping Henry Kissinger write chapters on China and Japan for one of his books. From there, he joined the Treasury Department and began a meteoric rise through the bureaucracy.
In the five months since Barack Obama introduced him as the next Treasury secretary, Geithner has already run through what seems to be a career’s worth of images: the brilliant technocrat whose appointment caused stocks to soar; the neophyte public figure who flopped in his debut; the regulator who has grown too close to Wall Street; the Obama adviser with the same unflappable nature as his boss. One image that hasn’t yet attached itself to him, however, is his original professional image. By training, Tim Geithner is a China hand. And though the immediate financial crisis is likely to dominate his tenure at Treasury, the economic relationship between the United States and China may ultimately prove just as important. It could be crucial to preventing the next crisis.
Hopefully Geithner really is a "China hand" and will perform well in the contradictory and confusing world that is Chinese politics. The US is going to need China to stay on board with them over the next few years. If Geithner could somehow turn out to be a gifted negotiator with the Chinese (yeah, I know it's a stretch), that would cancel out a lot of the stumbles he's made so far in office.