US President Barack Obama and Chinese President Hu Jintao (胡錦濤) promised to work together to renew global growth and build a strategic partnership but did not discuss Beijing’s unease about its holdings of US debt and other disputes in their first meeting at the London economic summit.
Obama accepted an invitation to visit Beijing this year and the two leaders agreed to create a new US-China Strategic Economic Dialogue, said a senior US official who briefed reporters in London.
The official said Obama agreed during the meeting yesterday on the need to change the IMF to give China and other developing countries “an appropriate role,” but the two leaders did not discuss details. A bigger voice in managing the world’s finances is a key Chinese demand and Beijing has suggested its contribution to global bailout efforts would be contingent on receiving it.
“The presidents agreed that the strong links between China and the US economies have been a great mutual benefit, both in terms of trade and investment and they were eager to build on that,” said the official, who spoke on condition of anonymity in line with US government policy.
“Each side explained what they were doing and the goals they had in mind and just [expressed] the importance that we, together, stimulate our economies and get growth going,” the official said.
The Strategic Economic Dialogue, due to meet later this year, succeeds a twice-a-year forum begun under former US president George W. Bush to address a wide range of disputes over trade and other issues. The new forum, held once a year, is to be led by US Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner and, on the Chinese side, by Vice Premier Wang Qishan (王岐山) and State Counselor Dai Bingguo (戴秉國).
Hu and Obama avoided US-Chinese disputes, possibly to focus attention on the global economy.
They did not discuss Beijing’s unease about the safety of its vast holdings of US government bonds and its proposal last month for a global currency to replace the dominant dollar, according to the US official.
“There was no mention of either of those two subjects,” the official said.
Hu and Obama also avoided expressing their government’s criticisms of each other’s stimulus plans.
Beijing fears that Washington’s heavy spending might fuel inflation and weaken the dollar and has appealed to Obama to avoid steps that might erode the value of China’s estimated US$1 trillion in US government debt.
Washington needs Beijing to help finance its stimulus by buying more US Treasury securities and other Western governments want Chinese money to help finance a global bailout fund. China has said its biggest contribution to a recovery will be to ensure strong growth in its own economy, the world’s third-largest.
“There was not a detailed discussion of stimulus,” the official said.
However, he said Obama expressed awareness of the risks of higher inflation from stimulus spending and promised to bring down the US budget deficit after economic growth revives.
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