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US and China 'committed to trade' | |
(about 7 hours later) | |
The US and China are committed to fighting protectionism, US Treasury Secretary Timothy Geithner has said following two days of high-level talks. | |
He said the two countries shared an interest in ensuring that trade remained "open and rules-based". | |
He was speaking after meeting Chinese Vice Premier Wang Qishan in Washington. | |
Mr Geithner said China had agreed to boost domestic consumption and the US to toughen financial regulations to prevent another financial crisis. | |
After the two-day Strategic and Economic Dialogue, as the talks are known, the treasury secretary told reporters: "The United States and China are among the biggest beneficiaries of the global trading system and share a common interest in ensuring that global trade and investment remain open and rules-based". | |
Mr Geithner said the talks concluded with an agreement from China to increase domestic consumption to reduce its reliance on exports to US markets. | |
He added that in turn the US would implement tougher financial regulations. | |
The administration has asked Congress to increase capital requirement for banks to reduce exposure to debt default and strengthen the financial system. | |
Dollar fears | |
Meanwhile, US Secretary of State Hillary Clinton led separate discussions at the State Department, focusing on nuclear issues. | |
Afterwards, she said the US and China were united against Iran becoming a nuclear weapons state. | |
While the two sides appear to have found common ground in public, analysts say that differences remain. | While the two sides appear to have found common ground in public, analysts say that differences remain. |
In particular, China is worried about the value of the US dollar. | In particular, China is worried about the value of the US dollar. |
It holds huge amounts of US debt - more than $800bn (£486bn) of US Treasury securities alone. | It holds huge amounts of US debt - more than $800bn (£486bn) of US Treasury securities alone. |
It fears Mr Obama's stimulus spending will stoke inflation in the US, eroding the value of the dollar and making the US debt China holds worth a lot less. | |
"As a major reserve currency-issuing country in the world, the US should properly balance and properly handle the impact of the dollar supply on the domestic economy and the world economy as a whole," Mr Wang said earlier on Tuesday. | |
Meanwhile, US manufacturers complain they cannot compete fairly with their Chinese competitors, accusing Beijing of deliberately devaluing its currency to make its exports seem cheaper. | Meanwhile, US manufacturers complain they cannot compete fairly with their Chinese competitors, accusing Beijing of deliberately devaluing its currency to make its exports seem cheaper. |