| Modernization of China’s Financial Sector is Essential to U.S., Chinese Economic Goals |
| Monday, 24 May 2010 00:00 | |||
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This week, the most significant foreign delegation in the history of our country will travel to Beijing for the U.S.-China Strategic & Economic Dialogue (S&ED) – a series of high level talks between U.S. Treasury and State Department officials, and their Chinese counterparts. Given the immense importance of the diplomatic and economic relationships between these two countries, the Engage China Coalition encourages active cooperation and dialogue between the United States and China, which we view as the most constructive means to ensure that the citizens of both nations mutually benefit from the growing bilateral relationship. While the issue of currency exchange rates will likely drive the economic discussion, the S&ED provides a vital forum for leaders to address other significant economic issues facing both nations and to continue to work towards further modernization and reform of China's financial markets. Opening China’s financial sector to greater participation by foreign financial services firms is the fastest way for China to develop the modern financial system it needs, and is integral to China achieving its goals of maintaining high rates of growth and job creation and building a more services-based, consumer-driven economy – goals very much in the interest of the United States. China is the world’s second largest economy, and the fastest growing economy, but currently operates within an outdated and primitive financial system. Greater market access for foreign financial institutions would bring world-class expertise and best practices with regard to products and services, technology, credit analysis, risk management, internal controls, and corporate governance, and would contribute to economic growth, job creation, and the further structural reforms China seeks.Fair and competitive access to China’s fast-growing economy also presents a great opportunity for American businesses and workers. Progress on this front would help spur U.S. economic growth and create jobs. Given the U.S. economy’s comparative advantage in services, such as financial services, greater market access will also play a critical role in achieving President Obama’s recently-stated goal of doubling U.S. exports within the next five years. Modern and vibrant capital markets will provide the essential platform for achieving these results. Treasury Secretary Timothy Geithner echoed this important message in a speech last week in Tacoma, WA, where he said he will urge China to ensure a “level playing field” for U.S. companies trying to operate and invest in China. “Our agenda in Beijing will focus on reducing the challenges faced by American companies trying to export to China and to produce in China,” Geithner added. The G20 has recently expressed that strong, sustainable, and balanced global growth is a vital priority. The continued modernization of China’s financial system and assurances of fair treatment of foreign firms in China will help contribute to the re-balancing of global growth. Engage China commends Treasury Secretary Timothy Geithner, Secretary of State Hillary Rodham Clinton, Vice Premier Wang Qishan, and State Councilor Dai Bingguo for their leadership on this vital dialogue. The continued evolution and growth of the global economy requires that these leaders use this forum to further the shared economic and diplomatic interests of the United States and China, and we hope that they have a fruitful and productive dialogue.
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