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Geithner encourages trade balances at G-20

U.S. Treasury Secretary Timothy Geithner attends the first session of the G-20 Financial Ministers and Central Governors meeting in Gyeongju, South Korea.

TEXT OF STORY

STEVE CHIOTAKIS: Now the global perspective, what's happening in business and economics around the world and how it affects the U.S. Global finance ministers wrapped up their meeting in South Korea over the weekend. Treasury Secretary Timothy Geithner was there trying to get everyone to agree on a proposal to curb trade imbalances, a discussion that's likely to continue when the full G-20 meets in a few weeks.

Marketplace China Bureau Chief Rob Schmitz reports.


ROB SCHMITZ: The upcoming G-20 meeting was already being set as the battleground for a currency war. That didn't bode well for Geithner. He's trying to avoid putting China on the defensive. In the end, Geithner got China and the rest of the G-20 to agree to maintain trade balances at sustainable levels. Many economists are saying mission accomplished.

ANDY ROTHMAN: Anything that Geithner can do to shift the rhetoric away from "what's the exchange rate today?" That's a good thing.

Economist Andy Rothman says maintaining balanced trade among countries will be much better for the U.S. economy than forcing China to appreciate its currency. Rothman says a currency war is nothing but a sexy headline.

ROTHMAN: If you look at the exchange rate in China, it's appreciating at an annualized seven percent basis right now, which is pretty much what Geithner's looking for.

But it may not be what many in Congress are looking for. Congress could soon pass legislation to punish China for manipulating its currency.

In Shanghai, I'm Rob Schmitz for Marketplace.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

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