US treasury secretary visits China
Geithner visits America’s biggest creditor in bid to ease concerns over the dollar.
At the time, China held $768bn of US treasury securities, about 10 per cent of publicly traded debt.
‘Necessary deficits’
Officials said Geithner planned to argue that the big US budget deficits are temporary and necessary to fund a stimulus plan to help the economy recover.
Geithner is also expected to discuss how to boost global economic growth and to argue that increased public spending in China is part of the solution.
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The US needs Beijing to buy more American goods, and the administration of Barack Obama, the president, believes that the key to a prosperous global economy rests largely with China.
Washington wants China to spend more and save less, and rely less on its exports.
Geithner may also renew US appeals for the Chinese to revalue their currency, the yuan. American manufacturers see the yuan as undervalued against the dollar, making US products uncompetitive.
Besides discussing economics, Geithner is expected to use his visit to address the security concerns raised after North Korea’s recent nuclear weapons tests and missile firings. China is viewed as a critical player in any successful resolution of the North Korean standoff.