Remarks by Secretary Geithner at the Opening Ceremony of the 2012 Strategic and Economic Dialogue

Statement

I would like to express our appreciation to President Hu, Vice Premier Wang, Councilor Dai, and their colleagues for welcoming us to Beijing.

I would particularly like to thank Vice Premier Wang. The Vice Premier combines a broad strategic perspective with a well-deserved reputation as a highly effective problem solver -- a rare combination. He is a fierce defender of China's interests and dedicated to building a positive, cooperative, and comprehensive bilateral economic relationship with the United States.

We convened the first Strategic & Economic Dialogue three years ago in the depth of the most serious threat to the global economy and financial system in decades. We worked together to put out the fires of the global financial crisis, and today the world is better for it. We have worked to address the inevitable problems in our economic relationship in a constructive manner and with mutual respect. And both of our nations are better for it.

The diversity of the economic issues we address in this Dialogue reflects the breadth and importance of our relationship. We don't always agree, but we share strong common interests, and we recognize that promoting these common interests requires cooperation and commitment from both sides.

As two of the world's largest trading nations, we both depend on an open global trading system in which workers and companies compete on a level playing field. We have a common interest in promoting productivity growth through research and innovation, by protecting intellectual property and open markets. We have a mutual interest in building a global financial system that is more stable and less prone to crisis.

Because of the size and importance of our two economies, we also have a shared responsibility for the global economy. As we have worked to promote economic reforms in the United States and China, we have worked together to strengthen and reform the IMF and the World Bank and to mobilize more resources to support development in the world's poorest countries. We have worked together to support Europe's efforts to better manage its financial crisis. We have worked to build new mechanisms for cooperation on international economic and financial issues in the G-20 and the Financial Stability Board.

We meet at a time of risk and challenge in the global economy, and we both face considerable economic challenges at home.

In the United States, we are making progress in repairing the damage from the financial crisis and putting in place a stronger foundation for future economic growth. We are putting in place a comprehensive program of economic reforms to improve education, increase investments in scientific research and innovation, improve incentives for private investment, and reform the financial system. And we are working to legislate a comprehensive program of reforms to restore fiscal sustainability, building on tough, 10-year spending cuts we put in place last summer. While there is still a long way to go to recover from the financial crisis, the economic expansion in the United States is now more broad based and resilient, and we are significantly more advanced than are the other major developed economies in addressing the imbalances that helped cause our crisis.

In China, you are in the process of exploring the next frontier of economic reforms, recognizing as your predecessors did more than 30 years ago, that future economic growth will require another fundamental shift in economic policy. These new reforms recognize the new reality that China must rely more on domestic consumption rather than exports, and more on innovation by private companies rather than capacity expansion by state owned enterprises, with an economy more open to competition from foreign firms, and with a more modern financial system.

The United States has a strong interest in the success of these reforms, as does the rest of the world.

As we begin this next round of our Strategic and Economic Dialogue, I want to reaffirm our commitment to continue to work closely with China to build a stronger economic relationship and to build a stronger framework for cooperation on global economic issues that can balance the interests of the two largest economies in the world.

China and the United States are both now sources of strength for the global economy, and we are moving toward the more balanced, and complementary growth strategies that are so important for the world.

I hope we are able to make progress during these next two days on the range of issues before us.

As President Obama made clear at our first meeting in Washington three years ago, we are nations with different political values and traditions, different political and economic systems, and as we recognize those differences, it is important that we are able to talk to each other openly and make progress on issues that benefit both the Chinese and American people.

We will approach these issues with appreciation for the challenges you face in China and with confidence that China is strong enough to embrace the reforms we seek.

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