BEIJING — Wrapping up talks with Chinese leaders today on his first visit to China as Treasury secretary, Timothy Geithner seemed to be offering a new approach to dealing with China.
With the global financial crisis reverberating, Geithner quietly applauded Beijing's efforts to stimulate its economy and stabilize global markets. He also stressed cooperation and suggested that China should have a bigger role on the world stage.
In a speech at Peking University on Monday, Geithner said he wanted China and the United States to work together to create growth that was more balanced and sustainable. And he seemed intent on assuaging the fears of Chinese leaders that soaring deficits in Washington would destroy the value of China's huge investments in U.S. government debt.
"We will cut our fiscal deficit; we will eliminate the extraordinary governmental support that we have put in place to overcome the crisis," Geithner said. Later, when asked by a student whether China's investment in American assets was safe, he said: "Chinese financial assets are very safe."
Analysts say Geithner's visit signaled a shift in relations between the United States and China, with a tone from Washington that appears to be softer and more conciliatory.
The Bush administration maintained solid relations with China. But Bush administration officials regularly pressed Beijing to crack down on the counterfeiting of American software, movies and pharmaceuticals, and to allow American banks and investment banks greater access to the Chinese market.
Trying to prevent congressional Democrats from passing legislation intended to punish China for "manipulating" its currency, and thereby producing huge U.S. trade deficits, Bush administration officials pushed China to allow its currency to appreciate against the dollar, hoping that might slow the growth of Chinese exports to the United States.
Geithner's trip seems geared more toward winning the confidence of Chinese leaders. He also emphasized mutual respect and tried to ensure that Beijing does not sour on the dollar or stop buying Treasury notes.
C. Fred Bergsten, director of the Peterson Institute for International Economics in Washington, said U.S. relations with China had intensified and strengthened in recent years, growing increasingly important as the two nations recognized the need to try to solve global problems together. The Obama administration's more conciliatory approach may represent a new kind of diplomacy that has emerged in the wake of the financial crisis, he said.
"I suspect part of what you're seeing with Geithner is a change in style," Bergsten said Monday. "Maybe he'll raise some of these issues, like piracy and exchange rate reform, more quietly, and that may be more effective."