Timothy Geithner’s newly announced Beijing visit

[I AM NOT THAT GUY 5,715]

Coming Soon: A Different Kind of Treasury-Secretary Visit To China

Whatever else happens, Timothy Geithner’s newly announced Beijing visit is likely to be a telling contrast to the last time a U.S. Treasury secretary made his first mission to China.

When Henry Paulson traveled to Beijing in September 2006, the U.S. economy and financial system were riding high, and the secretary was well-known in China from his days as the boss at Goldman Sachs. Paulson counted Wang Qishan (then Beijing mayor, now vice premier) a friend, and visited Xi Jinping (then Communist Party secretary of Zhejiang province, now vice president and heir apparent to Hu Jintao), whom Paulson the banker had met before. While hardly a China basher, Paulson used his stature to press Beijing, however diplomatically, on a list of American gripes, from China’s tightly controlled exchange rate to limits on foreign investment in its financial industry.

Congressional ire over Chinese currency policy hasn’t disappeared and the subject is likely to come up during Geithner’s meetings. But it would be a surprise if Geithner’s visit is as dominated by U.S. grumbling as Paulson’s was.

For starters, Chinese leaders today aren’t in much of a mood to be lectured by the U.S. on financial policy – even if it remains true that China needs greater liberalization. Since late last year, they’ve been the ones doing the complaining.

And Geithner isn’t in much of a position to lecture. He has already eased off the tough stance he took on the yuan issue in January, when he said in written testimony that President Obama “believes that China is manipulating its currency,” and vowed “to use aggressively all the diplomatic avenues” available to seek a change in China’s currency practices. Last month, the Treasury declined to label China a currency manipulator, and Geithner later praised China on the issue, saying its leaders are “committed to continuing this path of further evolution in their exchange rate regime.”

Climb-down notwithstanding, there is likely residual wariness about Geithner given his January comment, which at the time triggered concern in Beijing. And in any case, unlike Paulson, he’ll need to spend time getting familiar with his counterparts. Although his ties to China are more longstanding than his predecessor’s – he lived here as a young man and has studied Chinese – he was relatively unknown among China’s financial and political elite until last year.

Perhaps the best indicator of what to expect from the Treasury secretary’s trip is what happened during the visit of his co-Cabinet member, Hillary Clinton. Instead of lecturing or complaining, the Secretary of State repeatedly thanked the Chinese for buying U.S. debt – and encouraged them to buy more.

–Jason Dean

http://blogs.wsj.com/chinajournal/2009/05/...visit-to-china/

[Saddle Bronc 124]

Well, considering the President has made a placatory (almsbowl-holding) visit to the junior partner (by economy size) in a trade agreement (specifically, his February visit to Ottawa),....not unexpected.

[I AM NOT THAT GUY 5,715]

It's coming full circle. When can we start having Green Tea Parties? Instead of Boston Harbor, it could be Los Angeles Harbor.

[Saddle Bronc 124]

Western Tea Parties can only be done with Earl Grey (which comes from Cachhar District) or Darjeeling--due to China's looking on India as rival.