Article first published as Chinaâ€™s Growth Interests US Leaders on Technorati.
US President Barack Obama has changed course, criticizing China for its exchange rate policy. Obama said on Monday that the rapid economic growth of China was in the interest of China. The announcement is interesting, though somewhat contrary to the accusations made against China that it was manipulating its currency value to keep it exceptionally low, making its exports cheaper.
The speech of Mr. Obama was telecast live on CNBC around 10:30 pm IST (GMT+5:30). He was on his way to raise funds for a Democratic Senate candidate for Pennsylvania. He said, in the interview given to CNBC, that China’s strong growth benefited the US. Moreover, he clarified that the US’ growth was also beneficial to China (exports).
The same opinion was acknowledged by the Treasury Secretary Timothy Geithner while giving a report to Congress on Sept. 16, according to Xinhua news agency. He said in his report, “We have very significant economic interests in our relationship with China. A strong and growing China benefits the United States, just as a strong and growing United States is good for China.”
Meanwhile, U.S. lawmakers are weighing new legislation to punish China for practices they say keep the yuan artificially low, hurting American jobs and competitiveness, as they grow impatient with a diplomatic approach that has yielded little so far.
Geithner has been warning the lawmakers that any rising tensions between two economic giants would bounce back and careful measures had to be taken. The tensions could lead to investors going berserk, he cautioned. He promised to take the issue to the G20 forum, thus buying time to persuade China in a diplomatic way to appreciate yuan value to the required levels in order to reduce the trade surplus.
The Obama administration acknowledged that China’s imports brightened the global economy and contributed substantially to recovery around the world. With over 1.3 billion people and an economy continuing to grow at or near double-digit rates, China is the US’ fastest-growing major overseas market