- The Washington Times - Monday, July 27, 2009

The Obama administration is hoping that two days of high-level talks with top Chinese officials in Washington this week will help restore China’s confidence in the dollar and to restore some balance to the lopsided U.S. trade deficit with Beijing.

President Obama, during opening ceremonies Monday morning at the Ronald Reagan Building and International Trade Center, stressed the two countries’ special bond as two of the world’s economic superpowers.

“The relationship between the United States and China will shape the 21st century, which makes it as important as any bilateral relationship in the world,” Mr. Obama said. “That reality must underpin our partnership. That is the responsibility we bear.”

Treasury Secretary Timothy F. Geithner sidestepped contentious issues of currency and trade in favor of emphasizing areas of agreement, striving to ease the fears of Chinese investors who have gobbled up hundreds of billions of dollars of U.S. debt.

“The actions taken by the United States and China made a substantial contribution to our collective success in blunting the force of the [current economic] crisis and restoring confidence,” Mr. Geithner said. “And both countries have made clear our commitment to maintain strong policy responses until recovery is firmly in place.”

Mr. Geithner added that close cooperation between the United States and China will be critical to design a “new framework to ensure sustainable and balanced global growth.”

Mr. Geithner made no mention of 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.

Secretary of State Hillary Rodham Clinton, who also spoke at the event, said the United States and China should be collaborators — not competitors — on economic and strategic fronts. “Although past relations between the United States and China have been influenced by the idea of a balance of power among great nations, the fresh thinking of the 21st century can move us from a multipolar world to a multipartner world,” she said. “It is our hope that the dialogue we initiate today will enable us to shape that common agenda.”

China also accentuated the positive Monday. Chinese President Hu Jintao, who isn’t attending the summit, said in a written statement said that the two countries “shoulder important responsibilities on a host of major issues concerning peace and development of mankind.”

Despite the cozy public rhetoric, it’s uncertain whether the talks — most of which are being held behind close days — will produce any meaningful headway in solving many sharp economic differences.

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

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. Chinese officials recently have held their tongue on the issue, saying instead they are satisfied that the Obama administration is serious about tackling the U.S. deficits once the economy and the banking sector recover.

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