- The Washington Times - Wednesday, June 3, 2009

Treasury Secretary Timothy F. Geithner wrapped up two days of talks Tuesday with Chinese leaders in Beijing by playing down contentious issues of currency and trade in favor of emphasizing areas of agreement.

Mr. Geithner, during a string of meetings with top Chinese officials, vowed that the United States is committed to lowering its ballooning deficit, a measure meant to ease the fears of Chinese investors who have gobbled up hundreds of billions of dollars in U.S. debt.

Chinese officials, in turn, promised to work with the United States to help stabilize the faltering global economy.

“Because of the strengths of the actions put in place by your government and by President Obama, we’re starting to see some early signs of stabilization and recovery in the global economy,” Mr. Geithner told Chinese President Hu Jintao.

The benign tenor of the talks, particularly on the American side of the table, was in contrast to a more hard-line approach toward the Chinese taken by Mr. Geithner’s immediate predecessor, Henry M. Paulson Jr.

Mr. Geithner barely mentioned - at least publicly - sore spots such as the value of China’s currency, which many in the West say is grossly undervalued and contributes to the United States’ skyrocketing trade deficit with China.

Mr. Paulson had urged China to revalue its currency, although he stopped short of accusing the country of unfairly manipulating its currency.

China also accentuated the positive during Mr. Geithner’s visit. China’s central bank in March rocked markets worldwide by suggesting the dollar be replaced as the world’s key reserve currency with an alternative currency or basket of currencies, a scenario strongly opposed in Washington. Yet Chinese officials publicly held their tongue on the issue, saying instead they were satisfied with Mr. Geithner’s assurances that the Obama administration was serious about tackling the deficits once the economy and the banking sector have recovered.

“You have established good working relationships with your Chinese colleagues, and you are committed to enhancing China-U.S. economic cooperation in tackling the international financial crisis,” Mr. Hu said. “I’m confident that as Treasury secretary, you will certainly make positive contributions to advancing China-U.S. economic and financial cooperation and the growth of the China-U.S. relationship.”

China holds about $768 billion of U.S. Treasury securities, making the communist country the United States’ biggest creditor.

Mr. Geithner, making his first trip to China since becoming secretary in January, said he told the Chinese president that cooperation between the two economic superpowers in recent months already has led to “early signs of stabilization” in the global economy.

“We have already demonstrated the capacity of our two countries to work together on the global stage to lay the foundation for economic recovery,” Mr. Geithner told Mr. Hu at the start of their meeting.

The Treasury also on Tuesday announced the two countries would meet for high-level economic talks in Washington in late July. The meetings will focus on “addressing the challenges and opportunities that both countries face on a wide range of bilateral, regional and global areas of immediate and long-term strategic interest,” said a joint statement by the Treasury and State departments.