US Official Calls China An 'Ally' In Financial Crisis
The U.S. and China have been in active communication during the global financial turmoil and Beijing has been 'a responsible participant and ally' in dealing with the crisis, said David McCormick, U.S. Treasury undersecretary for international affairs.
Mr. McCormick is visiting China as Washington tries to rally support for its $700 billion bailout of the U.S. financial system. The bailout would likely involve major buyers of U.S. Treasury bills, such as China, buying even more U.S. debt.
When asked whether Beijing had committed to buying more Treasurys, Mr. McCormick said he hadn't discussed with China's authorities any specific measures the country could take to help relieve the crisis. However, he stressed that a slowdown in either the U.S. or China would affect both economies.
'It's in both of our interests for each of our economies to prosper. That's a consequence that's become clear after the events of the last 12 months,' he said.
China's third-quarter economic growth slipped to 9%, from 10.1% in the second quarter. Some analysts expect that to fall to as low as 8% next year.
When asked whether the yuan was still undervalued, Mr. McCormick said it was appropriate for the Chinese currency to continue to appreciate on both a nominal and trade-weighted basis.
'While circumstances in the global economy have changed, we think that ultimately that trajectory needs to continue,' he said.
The yuan rose 6.7% against the U.S. dollar in the first half. But the yuan's appreciation has stalled in what seems to be a deliberate move by China's central bank to maintain stability during the financial crisis.
Mr. McCormick also said he hopes Beijing doesn't bring a halt to the liberalization of its financial system in response to recent events. |
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