US treasury secretary Timothy Geithner (Timmy) who spent part of his nomadic childhood in Mumbai will visit India on April 6-7 for the first time as treasury secretary to launch the US-India economic and financial partnership.Monday, April 05, 2010
Geithner's India visit to deepen trade ties
India hopes US visit will change its status as China's underdog.
Timothy Geithner will begin his maiden visit to India as US treasury secretary today, hoping to improve an economic relationship that is often eclipsed by Washington's trade with China.
Geithner will begin his two-day trip in Delhi – a city where he lived while his father was working for the Ford Foundation – holding meetings with Indian Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee.
The 48-year-old, who is an Asia expert and speaks fluent Mandarin, hopes to focus talks on global economic management, financial investment and building infrastructure, a senior treasury official said ahead of the visit.
"India is an emerging global power and one with which the United States has an increasingly vital economic and financial relationship," the treasury official said.
After years of lingering Cold War tensions, unease about Washington's close ties with Pakistan and Washington's displeasure at India's acquisition of a nuclear bomb, relations are blooming.
In mid-March the two countries signed a framework for co-operation on trade and investment in Washington, which US Trade Representative Ron Kirk said would tap the "almost limitless potential for growth in trade between our two countries". But ties between the world's first and fourth largest economies – and two of the world's largest democracies – are still overshadowed by the vast trade between China and the US.
"This trip is significant just for the fact that it is happening," according to Arvind Subramanian of the Peterson Institute for International Economics.
"First and foremost, this trip is about symbolism, aimed at establishing a parallelism with the US-China relationship," he wrote in a recent commentary.
Trade between India and the United States has roughly doubled in the last five years, as India has become one of the world's foremost emerging markets.
But that relationship, for years focused on trade and outsourcing, is increasingly focused on investment.
Bilateral foreign direct investment was worth around $21 billion (Dh77.07bn) in 2008, according to the treasury, still a pittance compared with flows between the United States and Europe, or China. To boost ties, Geithner is set to press India to open its highly regulated markets to US investment, in part by launching a US-India financial partnership.
The project would spur regular cabinet-level US-India meetings, in line with a similar programme between the US and China.
Washington argues that more open Indian markets would afford India easier and cheaper access to capital that could help finance the country's massive infrastructure needs.
It is a case Geithner is also likely to make when he visits Mumbai, India's business and financial capital, where he will meet leaders of US firms present in India, as well as top Indian CEOs.
Throughout the trip Geithner will be accompanied by Donald Kohn, Vice-Chairman of the Board of Governors of the Federal Reserve. link ~Kohn to leave Fed in June; gives Obama opening
GEITHNER DELAYS CHINA CURRENCY REPORT
US Treasury Secretary Timothy Geithner delayed a scheduled April 15 report to Congress on exchange-rate policies, sidestepping a decision on whether to accuse China of manipulating the value of the yuan.
Geithner in a statement yesterday urged China to move toward a more flexible currency and said a series of meetings over the next three months will be "critical" to bringing policy changes that lead to a stronger, "more balanced" global economy. The delay comes as Chinese President Hu Jintao is scheduled to visit Washington for a nuclear summit on April 12 and 13.
Geithner faces demands from Congress to label China a currency manipulator for keeping the value of the yuan little changed from about 6.83 to the dollar for almost two years. Geithner is instead betting that China will take steps on its own in the next several months to strengthen its currency, analysts said.
"There is pressure within China for a yuan revaluation and, as long as exports continue to rebound, there is a good chance that it will happen," said Elizabeth Economy, Director of Asia studies at the Council on Foreign Relations in New York. "If, however, there is a lot of public pressure emanating from the US, that will likely give support to those in the Chinese Government who do not want to see a revaluation."
Geithner's statement said countries such as China "with inflexible exchange rates" can promote global growth by "combining policy efforts to strengthen domestic demand with greater exchange-rate flexibility."
"A move by China to a more market-oriented exchange rate will make an essential contribution to global rebalancing," he said.
Lawmakers from both parties said Geithner is wrong to expect that negotiations will prompt such a move from China's leaders. With the US unemployment rate hovering near a 26-year high, some lawmakers say China's policies give its exporters an unfair advantage over their US competitors.
"We are disappointed, but not surprised, by the administration's decision," Senator Charles E Schumer, said in an e-mailed statement yesterday. "After five years of stonewalling, punctuated by occasional, but halting action by the Chinese, we have lost faith in bilateral negotiations on this issue."
Schumer, along with four other Senators, including South Carolina Republican Lindsey Graham, last month introduced legislation to require the Treasury to determine if a nation had a currency misaligned with the dollar and make it easier to respond by imposing import duties.
The Treasury's delay "underscores the urgent need" for Congress to pass such legislation, said Alan Tonelson, research fellow with the US Business and Industry Council, a Washington-based organisation representing 2,000 manufacturing companies.
Indo-US trade ties: Geithner to visit India on April 6-7-2010
India hopes US visit will change its status as China's underdog.
Timothy Geithner will begin his maiden visit to India as US treasury secretary today, hoping to improve an economic relationship that is often eclipsed by Washington's trade with China.
Geithner will begin his two-day trip in Delhi – a city where he lived while his father was working for the Ford Foundation – holding meetings with Indian Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee.
The 48-year-old, who is an Asia expert and speaks fluent Mandarin, hopes to focus talks on global economic management, financial investment and building infrastructure, a senior treasury official said ahead of the visit.
"India is an emerging global power and one with which the United States has an increasingly vital economic and financial relationship," the treasury official said.
After years of lingering Cold War tensions, unease about Washington's close ties with Pakistan and Washington's displeasure at India's acquisition of a nuclear bomb, relations are blooming.
In mid-March the two countries signed a framework for co-operation on trade and investment in Washington, which US Trade Representative Ron Kirk said would tap the "almost limitless potential for growth in trade between our two countries". But ties between the world's first and fourth largest economies – and two of the world's largest democracies – are still overshadowed by the vast trade between China and the US.
"This trip is significant just for the fact that it is happening," according to Arvind Subramanian of the Peterson Institute for International Economics.
"First and foremost, this trip is about symbolism, aimed at establishing a parallelism with the US-China relationship," he wrote in a recent commentary.
Trade between India and the United States has roughly doubled in the last five years, as India has become one of the world's foremost emerging markets.
But that relationship, for years focused on trade and outsourcing, is increasingly focused on investment.
Bilateral foreign direct investment was worth around $21 billion (Dh77.07bn) in 2008, according to the treasury, still a pittance compared with flows between the United States and Europe, or China. To boost ties, Geithner is set to press India to open its highly regulated markets to US investment, in part by launching a US-India financial partnership.
The project would spur regular cabinet-level US-India meetings, in line with a similar programme between the US and China.
Washington argues that more open Indian markets would afford India easier and cheaper access to capital that could help finance the country's massive infrastructure needs.
It is a case Geithner is also likely to make when he visits Mumbai, India's business and financial capital, where he will meet leaders of US firms present in India, as well as top Indian CEOs.
Throughout the trip Geithner will be accompanied by Donald Kohn, Vice-Chairman of the Board of Governors of the Federal Reserve. link ~Kohn to leave Fed in June; gives Obama opening
GEITHNER DELAYS CHINA CURRENCY REPORT
US Treasury Secretary Timothy Geithner delayed a scheduled April 15 report to Congress on exchange-rate policies, sidestepping a decision on whether to accuse China of manipulating the value of the yuan.
Geithner in a statement yesterday urged China to move toward a more flexible currency and said a series of meetings over the next three months will be "critical" to bringing policy changes that lead to a stronger, "more balanced" global economy. The delay comes as Chinese President Hu Jintao is scheduled to visit Washington for a nuclear summit on April 12 and 13.
Geithner faces demands from Congress to label China a currency manipulator for keeping the value of the yuan little changed from about 6.83 to the dollar for almost two years. Geithner is instead betting that China will take steps on its own in the next several months to strengthen its currency, analysts said.
"There is pressure within China for a yuan revaluation and, as long as exports continue to rebound, there is a good chance that it will happen," said Elizabeth Economy, Director of Asia studies at the Council on Foreign Relations in New York. "If, however, there is a lot of public pressure emanating from the US, that will likely give support to those in the Chinese Government who do not want to see a revaluation."
Geithner's statement said countries such as China "with inflexible exchange rates" can promote global growth by "combining policy efforts to strengthen domestic demand with greater exchange-rate flexibility."
"A move by China to a more market-oriented exchange rate will make an essential contribution to global rebalancing," he said.
Lawmakers from both parties said Geithner is wrong to expect that negotiations will prompt such a move from China's leaders. With the US unemployment rate hovering near a 26-year high, some lawmakers say China's policies give its exporters an unfair advantage over their US competitors.
"We are disappointed, but not surprised, by the administration's decision," Senator Charles E Schumer, said in an e-mailed statement yesterday. "After five years of stonewalling, punctuated by occasional, but halting action by the Chinese, we have lost faith in bilateral negotiations on this issue."
Schumer, along with four other Senators, including South Carolina Republican Lindsey Graham, last month introduced legislation to require the Treasury to determine if a nation had a currency misaligned with the dollar and make it easier to respond by imposing import duties.
The Treasury's delay "underscores the urgent need" for Congress to pass such legislation, said Alan Tonelson, research fellow with the US Business and Industry Council, a Washington-based organisation representing 2,000 manufacturing companies.
Indo-US trade ties: Geithner to visit India on April 6-7-2010
