Geithner in China

Geithner's tougher audience:  U.S. Congress   Source: AP
Geithner facing a tougher audience than China: the U.S. Congress Source: AP

A long-time China hand, Mandarin speaker, East Asia major at SAIS, son of an East Asia expert who opened the Ford Foundation’s office in Beijing, U.S. Treasury Secretary Tim Geithner is in China to jumpstart the Obama administration’s “strategic and economic dialogue.”  This effort puts a stamp of change on Bush’s “strategic economic dialogue,” the so-called G-2, or regular meetings between U.S. and Chinese leaders, initially headed up ably by the much-maligned former Treasury Secretary Hank Paulson, Geithner’s erstwhile partner in saving the planet last fall when the global financial system was in collapse.  The main “change we can believe in” the Obama administration will impose will be the insertion of Secretary of State Clinton into the dialogue.  The State Department, our country’s chief diplomatic agency, should well be involved in diplomacy with America’s most important partner/adversary.  But one wonders if the insertion of Mrs. Clinton is due to the belief that Geithner needs a tough-minded chaperone or because the Democrat-controlled government wants to hammer away at human rights and greenhouse gasses at every opportunity.  Under Bush, a division of labor was implemented, with Paulson taking the lead on China and Condy Rice on the Middle East.

Geithner made the rounds in Beijing today, ahead of his meeting tomorrow with China’s President Hu Jintao and Prime Minister Wen Jiabao.  Read his speech at Peking University, a nice, though not earth-shattering, lecture where he hit all the right political points.  He graciously applauded Chinese efforts to help the world exit the current crisis by stimulating their economy, a measure the Europeans have been reluctant to do.  Yet he still preached to the Chinese about consuming more, following an industrial policy less centered on heavy industry and manufacturing, and building a social safety net so the Chinese will spend more.  He committed to nervous Chinese watching their holdings of U.S. treasuries lose value of late that Obama would bring the fiscal deficit down to 3% of GDP, from a high above 10% this year, at the same time as he reiterated his administration’s firm commitment to expensive reforms of health care, education, infrastructure, and energy.  And, he hit the climate change gong for Al Gore (and for all inhabitants of the blue planet), though as the nation’s chief economic officer, he left any harangues about human rights to the much more cantankerous Mrs. Clinton.

Watch a video snippet of Geithner appearing before Chinese lawmakers, a much more accepting crowd than the U.S. Congress.  He felt compelled last January to cowtow to the protectionists and China-bashers in Congress (especially in his party, such as Senator Schumer), when he called China a “currency manipulator,” for which he later had to apologize.

Some China observers today, including this one, emphasize the rockier relationship likely for the G-2 under the Obama administration, compared to the fine bedfellows Bush and Co. and China made, due to likely U.S. moralizing on human rights and pressure on greenhouse gases.  Read a nice NYTimes piece on Geithner’s first day in China this June.

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