President Obama is hoping to achieve greater cooperation with China and the Chinese military in containing North Korea and Iran, both rogue nations, both aggressive, and both potential nuclear threats.
Chinese officials see the Chinese presence in these beginning talks as focusing on their desire to increase economic and security cooperation with Washington. China has misgivings over U.S. fiscal policy and worldwide global unpredictability. Chinese Vice Premier Wang believes the global economy is gaining strength. But, "the situation is still complicated and fraught with uncertainties." Matters of Mideast unrest and the earthquake in Japan have “seriously damaged market confidence."
The major single concern of China is the American debt ceiling and the ability the United States will have in the future to repay loans. China is the United States’ largest foreign creditor, and worries about whether Washington will be able to continue interest payments on treasury holdings currently valued at about $1.2 trillion. Congress is debating raising the ceiling on the potential national debt. Treasury Secretary Timothy Geithner has warned of a looming financial crisis, and has alluded to a possibility of default on loans if the debt ceiling isn’t raised.
Chinese officials accuse the U.S. of politicizing trade. They call for an early establishment of a timetable and roadmap for reform in export controls on high-tech products, and for relaxation of restrictions on Chinese investment in the U.S. Meanwhile, Secretary Geithner and Federal Reserve Chairman Ben Bernanke are pressing their dissatisfaction with “unfair trade practices” and currency manipulation. United States manufacturers claim the yuan, China’s currency, remains undervalued by as much as 40 percent. They will call on Congress to impose economic penalties if the stalling continues.
Secretary Geithner said, “In China, building on the remarkable reforms of the last 30 years, the challenge is to lay a foundation for a new growth model driven more by domestic demand, with a flexible exchange rate that moves in response to market forces, with a more open, market-based economy, and a more developed and diversified financial system.” Recognizing the truth in Geithner's words, China’s top policymaker responded that change would not take place “overnight.”
The talks, particularly those involving the Treasury Secretary, are founded in a desire for workable solutions to global economic concerns. The participants' sincere desire for dialogue may hopefully be fulfilled.