Posted on 11/17/2009 2:35:09 PM PST by Oldeconomybuyer
The United States and China, the world's first and third largest economies, have pledged to rebalance each other's economy and move in tandem on forward-looking monetary polices for a strong and durable global economic recovery, according to a China-US joint statement released in Beijing on Tuesday.
The statement, issued after talks between Chinese President Hu Jintao and his US counterpart Barack Obama, has climaxed the latter's first China trip since he took office in January.
"China will continue to implement the policies to adjust economic structure, raise household incomes, expand domestic demand to increase contribution of consumption to GDP growth and reform its social security system," said the statement.
The United States, in return, will take measures to increase national saving as a share of GDP and promote sustainable non-inflationary growth.
"To achieve this, the United States is committed to returning the federal budget deficit to a sustainable path and pursuing measures to encourage private saving," it said.
President Obama made it clear at an earlier press conference Tuesday afternoon that the rebalancing strategy would require America to save more, reduce consumption and reduce long-term debts.
The statement also said that both sides will pursue forward-looking monetary policies and have "due" regard for the ramifications of those policies for the international economy.
The two also agreed to expedite negotiation on a bilateral investment treaty, and work proactively to resolve bilateral trade and investment disputes in a constructive, cooperative and mutually beneficial manner.
Recognizing the importance of open trade and investment to their domestic and the global economies, the two are committed to jointly fight protectionism in all its manifestations.
"We both agreed to properly handle trade frictions between the two countries through negotiations on an equal basis, and to make concerted efforts to boost bilateral trade and economic ties in a healthy and steady way," said President Hu.
"I stressed to President Obama that under the current situation, both China and the United States should oppose and reject protectionism in all forms in an even stronger stand," he said.
The two sides also reiterated that they would continue to strengthen dialogue and cooperation on macro-economic policies and pledged to honor all commitments made at the first round of the Sino-US Strategic and Economic Dialogue last July, the Group of 20 summits, and the recently concluded APEC Economic Leaders' Meeting in Singapore.
The statement said that both sides commended the important role of the three G20 summits in tackling the global financial crisis, and were committed to work with other members of the G20 to enhance the G20's effectiveness as the premier forum for international economic cooperation.
China and the United States also agreed to work through a cooperative process on mutual assessment to make the G20 Framework for Strong, Sustainable and Balanced Growth a success.
The statement said that both sides welcomed recent agreements by the G20 to ensure that the International Financial Institutions (IFIs) have sufficient resources and to reform their governance structures.
"The two sides stressed the need to follow through on the quantified targets for the reform of quota and voting shares of IFIs as soon as possible, increasing the voice and representation of emerging markets and developing countries in these institutions consistent with the Pittsburgh Summit Leaders Statement," it said.
Why do I feel screwed just looking at the headline?
It is all smoke and mirrors, it is bullshit season and we are being served.
Right word, but the policy actually being pursued for partisan reasons in the exact opposite. Instead of sustainable budgets we get proposals for trillion dollar new entitlements. Instead of encouraging private saving, we get actuarially unsound pension and health schemes funded out of general revenue and promised redistribution and mythical future savings, plus higher taxes penalizing the higher incomes savings both require and create.
If they seriously wanted to encourage both fiscal soundness and private savings, the place to start would be reform of unfunded federal entitlements, transitioning them toward a funded system. Which would mean reducing future social security and health benefits and freeing a portion of the income directed to them to private savings. Instead they just voted for a give-away "cost of living" increase to social security recipients in a year prices actually fell; increase taxes going to the unsound and savings-destroying federal health care entitlements; increasing instead of reducing benefits, by $1 trillion, etc.
Their political coalition is set on economically suicidal policies that their economic experts know are stark raving mad and exactly the opposite of what the situation calls for. So they mouth what the experts call for, and then do what their political coalition was designed to do, 45 years ago.
It is just pathetic how incapable of independent action based on the realistic thought, the modern left has become.
President Obama made it clear at an earlier press conference Tuesday afternoon that the rebalancing strategy would require America to save more, reduce consumption and reduce long-term debts.
o-bow-man bent over a representative of the American people and China laughed as they stuck it to him.
Summary - As always o-bow-man blames the entire problem, both in China and the rest of the world, on his most hated enemy AMERICA.
................... move in tandem on forward-looking monetary polices for a strong and durable global economic recovery......................
Zero - “We’ll spend it, you just underwrite it!”
How do you encourage Americans to save? Increase interest rates?
Just asking.
In other words, we send jobs to their slave labor market and they send us cheap crap for Walmart.
Make interest income tax free, or at an absolute minimum tax only interest above the inflation rate. Likewise index capital gains for inflation.
And perhaps most importantly, stop demonizing those who are prudent and save.
Jack
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