Hu: Zero-sum game anachronistic for Sino-US ties

08:37, January 17, 2011      

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President Hu Jintao, in his signed articles appeared on two US newspapers, urged an end to anachronistic "zero sum" relationship between China and the United States and proposed increased cooperation.

Hu also had worries on the excessively easing monetary policy of the United States. He said "the liquidity of the U.S. dollar should be kept at a reasonable and stable level."

China has argued that the US Federal Reserve's November decision to buy US$600 billion of long-term U.S. government bonds, codenamed as "quantitative easing II", would undermine the greenback's value and lead to competitive currency devaluations. China has been complaining that a weaker US dollar will bring about a heavy loss in its huge holdings of US government debts, believed at around $900 billion.

Hu, who will visit US this week, struck an upbeat tone about ties with the United States in a rare written interview with two US newspapers, the Wall Street Journal and the Washington Post.

"We should abandon the zero-sum Cold War mentality," President Hu declared, and "respect each other's choice of development path." He suggested cooperation with America in areas like new and clean energy research and development, infrastructure, aviation and space fields.He also reassured foreign businesses that Beijing would continue to improve laws and regulations.

And he spoke encouragingly about the outlook for resolving tensions on the Korean peninsula, an area of concern to both countries.

The Chinese president also indicated he does not accept U.S. arguments that China's currency policy created the bilateral trade imbalance. Analysts believe China is studying the possibility of letting its currency, the yuan, to appreciate more quickly against the US dollar, in the coming two years, because it is in own economic interest.

Some thought Hu's articles on the two US newspapers augured well ahead of his Washington meetings with US President Barack Obama.

"Hu makes it clear that China intends to move forward on opening its markets, freeing up its exchange rate and restructuring its political system, but at its own pace and with little heed to external pressures for more rapid or broader reforms," The Reuters quoted Eswar Prasad, a Brookings Institution economist and former International Monetary Fund official, as saying.

Last week US Treasury Secretary Timothy Geithner said that China would be better off letting its currency strengthen to cap a rising inflation at home.

Hu said China is fighting inflation with a range of policies including interest-rate increases and hikes in the banks' reserve requirement ratios. The Chinese president said that inflation was not a big headache, saying prices were "on the whole moderate and controllable." Inflation in China hit 5.1 percent, a 28-month high in November.

Hu said that the US-dollar-dominated international currency system a "product of the past." He added that it would be a "fairly long process" to make China's own currency an international reserve currency.

Hu said he sees "signs of relaxation" in tensions between the two Koreas, an issue of major concern to both Washington and Beijing.

"Thanks to joint efforts by China and other parties, there have been signs of relaxation," Hu wrote.

People's Daily Online / Agencies


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