Frictions should not undermine U.S.-China economic ties: former treasury secretaries

Do not allow small frictions and differences in trade to undermine the U.S.-China economic relationship, which is essential to the world economy.

This is among the remarks made by former U.S. treasury secretaries W. Michael Blumenthal, Timothy Geithner, Jacob Lew, and Robert Rubin, in a conversation with Steve Orlins, head of National Committee on U.S.-China Relations, in New York on Wednesday evening.

Economic relations would not enjoy sustained, rapid growth if they were not based on mutual benefit, they said.

"The lesson (from my tenure) is that we each need to understand each other, understand the problems we have with each other, and try to work on them as people who engage in a constructive relationship," said Rubin, who served as treasury secretary during the Clinton administration.

"(Bill) Clinton has a conviction which I think is ever more the case today that the bilateral relations between the U.S. and China was going to become the most important relationship we had, it certainly has become that," he said.

Blumenthal, treasury secretary during the Carter administration, said that since former U.S. President Richard Nixon, the importance of establishing a strong relationship between the United States and China, and working hard to make that happen, has been a "bipartisan matter."

"It doesn't matter there are only four former Democratic secretaries here, because if you have had those serving under Republicans, they would have agreed with much what we have talked about here," said Blumenthal, who once lived in Shanghai for almost a decade in his early years.

China's official data showed bilateral trade surged from 2.5 billion U.S. dollars in 1979 to 519.6 billion dollars in 2016, a more than 200-fold increase.

The vibrant, cooperative economic relationship has already gone well beyond bilateral territory.

Most recently, China and the United States have joined hands and worked together with other countries to counter the international financial crisis and promote a global economic recovery, said Geithner, treasury secretary during the first term of the Obama administration.

"Three quarters of the time we spent with the Chinese leadership was figuring out ways to cooperate during the economic crisis," said Geithner, who once studied the Chinese language in Beijing for six months in the early 1980s.

"I found that we had as deep and broad a relationship with Chinese financial authorities as with those of Germany, Europe and Japan," he said.

The United States and China have also worked together in addressing major international and regional issues.

"On transnational issues, the Chinese really started maturing in the last four to five years. Climate change is a great example," said Lew, treasury secretary from 2013 to 2017 under the Obama administration.

"If the U.S. and China had not moved forward in climate change conversations, the Paris Agreement would not have happened," Lew said.

On the accusation of China manipulating its currency, Rubin said: "I don't know of a mainstream American economist who believes that China is manipulating its currency."

"Objectively over the last year, China has been doing the opposite...to the fact they are intervening at their expense to protect their currency," Lew said.

"If China really had an economic crisis and the RMB plummeted, it could result in a global currency war," Rubin said.

The secretaries agreed that it is all the more important for China and the United States to communicate, coordinate and cooperate more closely for the sake of global stability.

"The best way forward," said Rubin, "is the U.S. and China working together to provide leadership to the global community." Endi