WASHINGTON — Consumer demand and currency policy in China will be in play next week during Treasury Secretary Timothy Geithner’s first trip to that country since taking office.
This story first appeared in the May 29, 2009 issue of WWD. Subscribe Today.
Bilateral trade and investment and the global recession are also expected to be on the agenda.
During a briefing with reporters on Thursday, a senior Treasury official said a primary objective of the trip will be discussions to lay the groundwork for sustainable growth once the global economy starts to recover. For China, key elements of that effort will be fostering stronger domestic demand for goods and having a flexible exchange rate, the official said.
Critics have argued that China manipulates its currency to make its exports cheaper, which puts U.S. companies at a competitive disadvantage. President Obama and Geithner have accused China of holding down the value of its currency, but an April report from the Treasury Department stopped short of officially labeling China a “currency manipulator.”
In recent Senate testimony, Geithner said China had already allowed its currency to appreciate and taken steps to help stimulate domestic demand.
Other issues expected to be discussed during the trip include maintaining open trade and investment between the U.S. and China, adhering to commitments to avoid protectionist measures, the complicated investment ties between the two countries and what additional steps may be needed to fuel economic recovery.
Geithner will meet with Chinese President Hu Jintao, Premier Wen Jiabao and Vice Premier Wang Qishan during his two-day trip. He will also confer with officials from the China Investment Corp.