Strategic and Economic Dialogue Closing Statement

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Strategic and Economic Dialogue Closing Statement
Treasury Secretary Tim Geithner
Beijing, China
As Prepared for Delivery
I would like to begin by offering my appreciation to our Chinese hosts for their gracious hospitality. Our economic relationship is strong, and it will get stronger. It rests on the recognition by Presidents Hu and Obama that we have shared interests and shared responsibilities. Over the past year, we have acted together to help restore financial stability and economic growth to a world in crisis. Because we stood together, and because our Presidents were willing to act quickly and decisively, the world is in a much stronger position to successfully overcome the challenges ahead. When people write the history of this economic crisis, they will point to the decisive role played by international cooperation, in stark contrast to much of the pattern of past crises, where division delayed action and nations turned inward. And in writing that story, historians will point to the critical role played by the United States and China and the remarkable story of two nations, with such different traditions and such different stages of development, coming together with common objectives and a commitment to action. Last July, when we met in Washington, China and the United States first made the case for a broad rebalancing of economic growth. The G-20 embraced the cause, and now it is a global imperative. Since that time, China and the United States have acted on that commitment. Americans are saving and investing more and borrowing less from the rest of the world, and China is consuming and importing more. We worked together to mobilize a substantial increase in financial resources for emerging markets and developing economies, through the International Monetary Fund (IMF) and the Multilateral Development Banks (MDBs), and to restore trade finance. These commitments were essential to arresting the free fall in global economic activity and averting much greater damage to the livelihoods of hundreds of millions of people around the world.
And quietly but surely, we are building a very strong network of cooperative arrangements on a range of goals, from boosting access to trade finance facilities for small and medium-sized enterprises to fighting money laundering and terrorist financing, from strengthened cooperation on financial reforms to helping Haiti repair the damage from its devastating earthquake. This second meeting of the Strategic and Economic Dialogue takes place against the backdrop of a promising improvement in the pace of growth in China and the United States and across much of the world economy, tempered by a recognition of the challenges faced by countries in Europe in restoring fiscal sustainability and promoting more balanced growth.
We agreed to renew our efforts to strengthen and reinforce the global economic recovery. And we agreed to support the strong programs of policy reforms and financial support now being undertaken by the nations of Europe.
We welcome the strong commitment of President Hu to the process of economic reforms to expand domestic demand and increase household consumption; expand market access in keeping with established international economic and trading rules, and advance trade and investment liberalization. We welcome the fact that China's leaders have recognized that reform of the exchange rate is an important part of their broader reform agenda. Allowing the exchange rate to reflect market forces is important not just to give China the flexibility necessary to sustain more balanced economic growth with low inflation but also to reinforce incentives for China's private sector to shift resources to more productive higher value added activities that will be important to future growth. This is of course China's choice. And we welcome the progress we achieved to provide a more level playing field for U.S. firms in China. China has taken a series of steps to modify its policies to promote innovation and technological advancement. China has revised certain aspects of its product accreditation system, such as the requirement that products be patented or trademarked in China. It has affirmed its commitment to abide by the principles of non-discrimination; market competition; open trade; intellectual property protection; and leaving the terms of technology transfer and production processes to agreement between enterprises.
And we have agreed to a process of dialogue over the coming weeks and months, led by my colleagues Ambassador Kirk, Secretary Locke, and Science and Technology Director Holdren to find ways to address our remaining concerns.
We also welcome China's commitment to submit a revised offer on joining the WTO Agreement on Government Procurement by July 2010, as well as its commitment to reduce barriers to foreign investment in services, high-technology goods, high-end manufacturing, and energy saving products and facilitate foreign investment by decentralizing review and approval processes. This is progress. It does not fully resolve our concerns, but it gives us a set of basic principles on which to move forward. I want to thank Vice Premier Wang in particular for his personal role in advancing this agenda.
The relationship between our two countries is strong and beneficial for both sides. American exports to China are growing much more rapidly than exports to the rest of the world. Compared to the first quarter of 2009, our exports to China went up by almost 50 percent while exports to the rest of the world went up by 20 percent.
These developments demonstrate the strength and dynamism of the American economy, as well as the importance of the process of rebalancing underway in China to promote stronger growth in domestic demand. And this shows that our economic strengths are complementary. Just as America benefits from China's growth, so too does China benefit from growth in the United States.
American companies are leaders in innovation in the goods and services the world needs to grow. We are seeing a promising rise in private investment in the United States, dramatic ongoing gains in productivity supported by a stronger financial system, and a carefully designed and very substantial commitment by the U.S. government to promote investments in innovation and basic research.
We bring to this Dialogue respect for China's interests and a commitment to closer cooperation on all the major global challenges. And a recognition of the special responsibility of the United States to contribute to the stability of the global financial system.
I want to close by once again expressing my sincere appreciation to President Hu and Premier Wen and to the Chinese delegation for their leadership and hospitality. I am looking forward to continued progress at the forthcoming G20 meetings, first with Finance Ministers and Governors in Korea and then with Leaders in Toronto in June.

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