What the U.S. wants from China
TEXT OF STORY
Steve Chiotakis: Asian markets closed mostly higher today, but Chinese shares were slightly lower. That’s despite some really good news out of China.
The country’s industrial production shot up more than 16 percent to a year-and-a-half high last month. That’s an indication that the world’s third-largest economy seems to have put the worst of the global financial crisis behind it. Now, this comes ahead of President Obama’s first trip to China, which begins on Sunday. So what does the U.S. want from China, economically, and vice versa? Ashley Milne-Tyte reports.
Ashley Milne-Tyte: President Obama is likely to recognize what China has done to help conquer the downturn.
Nicholas Lardy is a senior fellow at the Peterson Institute for International Economics.
Nicholas Lardy: I think the president will certainly have to acknowledge that China is the first globally-significant economy to begin to grow again, they came off the bottom, they’ve now had 10 months really of very strong economic growth. It is helping to pull the rest of the world along.
He says China’s imports are now growing faster than its exports. Its demand for foreign goods is helping the rest of the world recover. Of course, no trip to China would be complete without talking about the currency.
Lardy: The president has said he would raise the currency issue. That probably means allowing the Chinese currency to appreciate.
As for China, it wants the U.S. to back off from what it considers protectionist trade measures. And then there’s the dollar. China holds lots of assets in dollars. It’s worried about what inflation might do to their value and it wants the U.S. to reduce its debt.
I’m Ashley Milne-Tyte for Marketplace.
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