Clinton urges China's continued investment in U.S.

Sunday 22nd February, 03:14 PM JST

BEIJING —

U.S. Secretary of State Hillary Rodham Clinton is urging China to continue investing in United States Treasury bonds and said Sunday that country’s continued investment in the U.S. is a recognition that the two countries depend on each other.

“I certainly do think that the Chinese government and central bank are making a smart decision by continuing to invest in treasury bonds,” she said during an interview with the show “One on One.” “It’s a safe investment. The United States has a well-deserved financial reputation.”

In order to boost the economy, the U.S has to incur more debt, she said. “It would not be in China’s interest if we were unable to get our economy moving,” Clinton said. “So by continuing to support American Treasury instruments, the Chinese are recognizing our interconnection. We are truly going to rise or fall together. We are in the same boat and, thankfully, we are rowing in the same direction.

“Our economies are so intertwined, the Chinese know that to start exporting again to their biggest market, namely the United States, the United States has to take some very drastic measures with this stimulus package, which means we have to incur more debt.”

With the export-heavy Chinese economy reeling from the U.S. downturn, Clinton has sought in meetings with President Hu Jintao, Foreign Minister Yang Jiechi and Premier Wen Jiabao to reassure Beijing that its massive holdings of U.S. Treasury notes and other government debt would remain a solid investment.

Yang responded that China wants to see its foreign exchange reserves—the world’s largest at $1.95 trillion—invested safely and wanted to continue working with the United States. “I want to emphasize here that the facts speak louder than words. The fact is that China and the United States have conducted good cooperation, and we are ready to continue to talk with the U.S. side,” Yang said.

During her trip to China, Clinton’s emphasis on the global economy, climate change and security were meant to highlight the growing importance of U.S.-China relations, which have often frayed over disagreements on human rights. Authorities in Beijing face a year of sensitive anniversaries—20 years since the crushing of the Tiananmen Square democracy movement and 50 years since the failed Tibetan uprising that forced the Dalai Lama into exile.

As she wrapped up her trip to China, she also met with women rights advocates and attended church after a day of talks on Saturday with Chinese officials focused on economic and climate change cooperation rather than differences on human rights that traditional feature prominently in U.S.-China talks.

The session at the U.S. Embassy in Beijing gathered female lawyers, academics, environmental activists, health care workers and entrepreneurs to highlight the growing leadership role of Chinese women.

On Saturday, Clinton and Yang said regular dialogue on economic issues would now include terrorism and other security issues. Details will be finalized by President Barack Obama and the Chinese president at an economic summit in London in April.

“We have every reason to believe that the United States and China will recover and together we will help lead the world recovery,” she told reporters at a news conference with Yang.

But ahead of her talks, Clinton said China’s controversial human rights record would be largely off the table, a blunt admission that startled rights groups and dispensed with standard diplomatic tact.

Activists complained Saturday that Chinese police were monitoring dissidents and had confined some to their homes during Clinton’s two-day visit. Several of those targeted had signed “Charter 08,” an unusually open call for civil rights and political reforms.

Along with cooperating on the financial crisis, the U.S. wants China to step up efforts to address threats from nuclear programs in Iran and North Korea, and the tenuous security situations in Afghanistan and Pakistan.

With China surpassing the U.S. last year as the world’s leading producer of greenhouse gases, Clinton said she and Chinese officials had agreed to develop clean energy technology that would use renewable sources and safely store the dirty emissions from burning coal.

Visiting a new gas-fueled power plant in Beijing, Clinton urged China not to repeat the “same mistakes” that Western countries had made when they developed.

Clinton was capping a week on the road in Japan, Indonesia, South Korea and China intended to demonstrate the Obama administration’s commitment to Asia.

Beijing was the last and perhaps most important stop on Clinton’s itinerary, although she sought to assure officials in each capital of the new administration’s intent to re-engage with them.

In Japan and South Korea, concerns over North Korea’s nuclear program dominated the agenda, particularly amid a rise in belligerent rhetoric from Pyongyang directed at Seoul. She reaffirmed U.S. alliances with both countries and signed an agreement in Tokyo on the realignment of American forces.

Clinton raised eyebrows on Thursday when she suggested that a potential succession crisis to replace reclusive North Korean leader Kim Jong Il might be behind the hostility and that such a power struggle might complicate efforts to restart stalled nuclear disarmament talks.

She dismissed surprise over her remarks by saying her observation was nothing new.

In Indonesia, Clinton promised that the Obama administration would not neglect Southeast Asia, a region that felt slighted during President Bush’s two terms in office. She also announced that planning was under way to resume Peace Corps programs in Jakarta.

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13 Comments

smithinjapan at 04:39 PM JST - 22nd February

Well, the need for investment is no surprise, nor is Clinton's somewhat lax stance on China's human rights abuses in connection with said desire for continued investment.
SushiSake3 at 06:37 PM JST - 22nd February

She is urging China to purchase moer worthless U.S. government debt?
rajakumar at 07:15 PM JST - 22nd February

Globally there is today,roughly 20 times present annual global trade in money. This is around 1200 trillion USD dollars.

If world slowing down today because of 30 trillions(30,000 billion) that still leaves about 1170 trillion of dollars out there,if we keep the global economic confidence stable and don't push down some company values further.

A lot of trillions of this have been pumped into China or loaned by China/US-EU-Japan and also by others .

China now can make planes,have their own version of NASA, nuclear power plant technolgy, magnetic levitation train technology and many other tech products for trade.

They have more PC users than any other nation. China also has surpassed US in car buying.

Many things we use like PCs,toys,fruits,cars,watches,batteries and many other things, just name it ,now are made in chinese plants/plantations.

They also will be putting 8 trillions or more in future, into global trade annually.

The rich money making corporations in China/USA need to invest in each other more to increase global trillions,in right way for all nations to prosper.

Raw materials companies,agro production plantations companies and Japan-China-US-EU support businesses need to expand more globally the right way ,with the right stuff.

East China-Japan-Korea and west USA-EU must take the lead to pulling up many nations-economy in their new found global teamwork of 2009/2010s.
SuperLib at 07:52 PM JST - 22nd February

What he said.
Sarge at 09:07 PM JST - 22nd February

"With the export-heavy Chinese economy reeling from the U.S. downturn..."

The Chinese had best do what's best for their best customers.

Sushi: "She is urging China to purchase more worthless U.S. government debt?"

And China will buy it!
smithinjapan at 10:06 PM JST - 22nd February

sarge: glad you can man up and admit it's worthless. The US is not in any position to tell China what to do, since the former DESPERATELY needs the latter. Not to praise the Chinese... they need the US nearly as bad, but for different reasons, and the US will simply collapse without Chinese investment.

This is why China was saved for last while Japan was simply a stop-over.
Sarge at 10:16 PM JST - 22nd February

"The US will simply collapse without Chinese investment"

And if the U.S. collapses, the export-heavy Chinese economy collapses.
SuperLib at 10:22 PM JST - 22nd February

The US consumer is the best means to control the rural parts of China. When the US wants cash, China will give it whether they like it or not.

If I were the rest of the world, I'd be worried about what China and the US talk about behind closed doors...
Wolfpack at 12:50 AM JST - 23rd February

Pretty sad to see Clinton over there on bended knee begging the Chinese to invest in the American economy. It would be better for her to kow-tow to Obama and beg him and her Deomcrat colleagues in Congress to stop spending money that the government doesn't have. They have only be in office a month and they have already outdone Bush and the Republican Congress.
VOR at 02:10 AM JST - 23rd February

the part that is not reported is the "in exchange for what" details. If the Chinese were to quit lending our overspending government money, the government would have to start acting fiscally responsible. Obama and his cast of thieves are already on target to out do the previous administration within the first three years and then at about year four act as if they are balancing the budget. People paying attention will not be so easily fooled.
GJDailleult at 06:46 AM JST - 23rd February

"Reagan proved deficits don't matter" - Dick Cheney, 2002

So nothing to worry about then. Seriously though - "People paying attention will not be so easily fooled." No offense, but I advise you to start following your own advice. The idea that if China stops lending your government will start acting fiscally responsibly is not a comment from someone paying attention.
Tatanka at 06:55 AM JST - 23rd February

Where else is China going to put its money? Euros? LOL The Chinese would rather put a gun in their mouth then invest in a European company where employees think working over 30 hours a week constitutes a human rights violation...
VOR at 09:55 AM JST - 23rd February

hey GJ, if you were paying attention, when Reagan ran up his deficits to get the basketcase economy he inherited from Carter and the Democrats going, he did it primarily by cutting taxes, rebuilding the military and cutting entitlements. The deficits he ran up never exceeded 10% of the GDP funded primarily by the US ally, Japan.

Do you have any idea how much Obama's deficits are or will be in relation to the GDP? If my sources are correct Obama's deficits will be between 40-60% of the GDP. If true, the US will be beholden to the Chinese for a very long time. You are comfortable with the Chinese determining our future?