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After currency row, US, China see need for talks
Washington (AFP) Feb 3, 2009 After a currency spat in the midst of global financial turmoil, the United States and China have agreed on the need to hold high-level talks to resolve their economic issues, officials said. But US President Barack Obama's administration does not want any institutionalized economic dialogue to be the centerpiece of discussions between the two powers, a strategy pursued by his predecessor, George W. Bush. US Treasury Secretary Tim Geithner spoke with Vice Premier Wang Qishan by phone late Monday and "agreed on the need for a continued high-level dialogue on bilateral economic issues," a statement from Geithner's office said. They also emphasized the need to maintain close consultations "during this difficult period for the global economy" as the United States struggled with a deepening recession and China grappled with massive job layoffs that could trigger social unrest. The talks between the two finance chiefs came nearly a fortnight after Geithner was at the center of a storm after accusing China of manipulating its yuan currency, a charge vehemently denied by Beijing. The statement Tuesday did not say whether the twice-yearly US-China "Strategic Economic Dialogue" held under the Bush administration would be continued under Obama's tenure. The cabinet-level Strategic Economic Dialogue was launched in December 2006 and led by Geithner's predecessor, Henry Paulson, a former top investment banker who enjoyed cordial ties with the top Chinese leadership. The dialogue had overshadowed a so-called Senior Dialogue between officials from the State Department and the Chinese foreign ministry. The Obama administration seems more interested in a dialogue with China that covers all perennial US concerns, such as human rights, Chinese military expansion, Tibet and Taiwan, which Beijing considers a renegade province. "We need a comprehensive dialogue with China," US Secretary of State Hillary Clinton said last week, criticizing the Bush administration for focusing too much on economic issues. "The strategic dialogue that was begun in the Bush administration turned into an economic dialogue, and that is a very important aspect of our relationship but it is not the only aspect." Although the Obama administration may not have decided yet on a premier bilateral dialogue mechanism, experts said it made sense to continue the economic dialogue against the backdrop of the current economic crisis. "I personally think, given the relative increased importance to economics, it would make sense to continue a dialogue that had a very strong focus on finance, trade, economics," said Nicholas Lardy, a China expert at the Washington-based Peterson Institute for International Economics. "I don't think you can put everything into one pot as Hillary seems to be suggesting in her comment." It remains unclear how bilateral ties will evolve under Obama, who waited until last Friday, his 11th day in office, before telephoning Chinese President Hu Jintao. In their telephone talks Monday, Geithner and Wang discussed global economic challenges, the important role that China and the United States played in addressing these challenges and the US-China economic relationship, the Treasury statement said. The statement did not indicate whether the talks also touched on the prickly currency issue that Geithner had highlighted during Senate testimony before his confirmation. Geithner had said that Obama believed China was manipulating its currency, echoing a longstanding concern among some US lawmakers who blamed the yuan for the ballooning US trade deficit with China. "The 'manipulator' term has long been understood as a cudgel to be wielded only if all other face-saving measures have been exhausted," noted Charles Freeman of the Washington-based Center for Strategic and International Studies. "Wielding it this early could force a street fight with Treasury's Chinese interlocutors," said the ex-US trade envoy for China. Share This Article With Planet Earth
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