U.S., China agree to work together to rebuild economy
WASHINGTON -- The United States and China agreed Tuesday to jointly rebuild the global economy on a sounder footing once the recession finally ends.
Concluding two days of talks, diplomats from the two sides agreed on a four-part road map to guide their economies. Officials sketched a vision of a globe better balanced between Asian producers and Western consumers and buttressed by a financial system less prone to volatile bubbles.
"The basic importance of this is the recognition by both of us that things are going to have to change going forward. We're going to make sure we come out of this with a stronger foundation, a more balanced global economy, a more stable global economy," said Treasury Secretary Timothy Geithner, who co-chaired the U.S. delegation along with Secretary of State Hillary Clinton.
Both U.S. and Chinese officials hailed the talks as unprecedented, though they built on a series of twice-yearly meetings begun during the Bush administration.
The two nations — the current and perhaps future world superpowers — are locked in a mutually dependent financial relationship that has deepened dramatically in recent years.
China is the largest foreign purchaser of U.S. Treasury securities, while American consumers have gobbled up enormous amounts of toys, clothes and food from Chinese companies.
Tuesday's joint statement included several general goals for each country. The U.S. vowed to raise its savings rate and lower its budget deficit to "sustainable levels" by 2013. China pledged to reorient its economy toward a greater reliance on domestic demand rather than exports.
Economists generally support such objectives, saying they'd help avoid some of the imbalances of recent years that added to the current crisis. But such goals broke no new ground, and came with other broad pledges to attain "a sound financial system" and "open trade" with almost no details of how such tasks would be accomplished.
"It's very hard to know what the new equilibrium will be for the U.S. economy. ... (But) we'll look back over time and see the last decade as anomalous and exceptional. We've learned some tough lessons as a country," Geithner said.
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