Joint Press Availability With Secretary of the Treasury Timothy Geithner

Press Availability
Hillary Rodham Clinton
Secretary of State
Secretary of the Treasury Timothy Geithner
Eisenhower Executive Office Building
Washington, DC
July 28, 2009


MR. KELLY: Can I ask you to take your seats, please? If we could have your attention, Secretary Clinton and Secretary Geithner will take a few questions once we’re all settled. And the first question will go to Deb Solomon from The Wall Street Journal.



QUESTION: Secretary Geithner --


MR. KELLY: Can you speak up?


QUESTION: How concerned are you about China’s focus on the U.S. budget deficit, and what types of assurances did you give them about our efforts here to bring it down?


SECRETARY GEITHNER: Not concerned. In fact, we’re in a very similar place. Again, in the face of this acute crisis we saw around the world sweep around the world last year, we have both put in place very powerful support for private demand recovery-type programs like you saw in the United States. China has done a very similar type approach. Our central banks have moved very aggressively to provide support, providing liquidity to markets.


That basic strategy, I think we agree, is the necessary path to recovery. But China, like the United States, understands that as we see recovery take hold, we’re going to need to reverse those exceptional actions. And so as China will do, we in the United States will move to bring our fiscal deficits down over the medium term, and we will work to reverse the other exceptional actions we’ve had to take to stabilize the crisis. I think we’re in a very similar position, shared strategy, much more in common than what separates on – us on broad strategy.


QUESTION: Can I follow up on that?


MR. KELLY: (Inaudible) from AFP.


QUESTION: Hi, Secretary Clinton. Both you and the President mentioned human rights as an area of some difference between the United States and China. I wondered how much – how integral human rights are to the Strategic Dialogue and what you actually talked about in the discussion, and specifically if you talked about the situation in Xinjiang.


SECRETARY CLINTON: Human rights is absolutely integral to the Strategic and Economic Dialogue. It is a part of our policy not only with China but with other countries. It’s bilateral as well as multilateral. We discussed a number of human rights issues, including the situation in Xinjiang, and we expressed our concerns. We obviously had some very good exchanges between ourselves and the Chinese about their perspective and ours, but it was certainly a matter of great interest and focus.


MR. KELLY: (Inaudible) Xinhua.


QUESTION: Secretary Geithner, I noticed that U.S. agreed to take consideration on the influence of its monetary policy. Could you elaborate just a little bit? And how do you comment on the specific outcome of this dialogue? Thank you.


SECRETARY GEITHNER: I think the most important thing we achieved today was to agree on this broad framework for policies and reform, both China and the United States, to help lay the foundation for a more sustainable, more balanced global recovery. We want to be very careful, as we work together to help move the economy – global economy – back from crisis to growth, that we don’t lay the seeds of future crises.


So as part of that – again, this is the critical thing – that as we move to raise private savings in the United States, as we move to bring down our fiscal deficit in the future, as we move to put in place a more stable, more resilient financial system in the United States, we need to see actions in China and in other countries to shift the source of growth more to domestic demand. Those are necessary complements; they have to work together. And I think that’s the most important strategic achievement here, and it’s critically important to the rest of the world. It’s not something that China and the U.S. can do on their own, but unless we do it, it won’t be possible for the rest of the world as well. So I’d emphasize that.


Now, of course, we both recognize that the policies we undertake in our own countries have big effects, significant effects, on the rest of the world. And we take the responsibilities that come with our role in the world very, very seriously. And we – this President of the United States, working with the Congress – will work very hard to make sure we build a stronger economy, a more productive economy, in the future. And then, as he said, once we are confident that recovery is firmly established, we will move to reverse these exceptional steps we’ve had to take to help address the crisis.


MR. KELLY: (Inaudible) Reuters.


QUESTION: Secretary Geithner, I believe you mentioned something about the U.S. savings rate going up recently. Do you think that the Chinese accept that as something that’s in the long term, that this is – that since the crisis we’ve now reached reach a point where Americans are going to be saving more? And I guess the second half of that thought is just do you believe that the Chinese will indeed buy more U.S. goods and become less reliant on the U.S. as an export market?


SECRETARY GEITHNER: I think that it’s very hard to know what the new equilibrium will be for the U.S. economy, but I think that we’re more likely to decide that these changes we’ve seen in private savings already are durable. And I think it’s more likely that you’re going to see private savings rate return to what was more typical for the U.S. economy over the preceding decades, and we’ll look back over time and view the last decade as anomalous and exceptional. That’s because I think the – we’ve learned some tough lessons as a country, and I think that the basic lesson of the importance of living within our means as both a country and as a – at the household level is an important, necessary lesson.


And I also believe that China will continue to move, as it has, to become more integrated into the world economy, more open. And as you saw them lay out today, they’ve laid out a very ambitious set of reforms to shift the sources of future growth away from the kind of heavy investment-intensive, also carbon-intensive, export-intensive sources of growth, towards an economy more reliant on services, more consumption. I think that is a necessary transformation.


And I think, again, if you look at China’s record, if you look at what China has achieved over the last 30 years, they have a remarkable record of letting out – laying out a path for ambitious reform and actually delivering on those commitments. So I think you should take these as enormously consequential objectives, not just for the United States, but for the world as a whole.


MR. KELLY: (Inaudible) CCTV.


QUESTION: Secretary Clinton, U.S. and China are two countries separated by two very different (inaudible). My question is what have you learned about China (inaudible) that you did not know previously, besides that State Councilor (inaudible)? (Laughter.)


SECRETARY CLINTON: That was pretty consequential. This has been a very rich experience the last two days. I think it’s important to build relationships between individuals as well as peoples and countries. I am very gratified by the positive commitment on the part of our Chinese counterparts to building those relationships, to achieving a level of what has been called strategic trust. And I come away from the last two days even more convinced than before we started that as open a relationship as we can achieve between the United States and China is in the best interests of both our countries and the world.


The level of sharing at a candid and deep level that we experienced over the last two days was unprecedented. And I think what you’ve heard from Secretary Geithner is that there is a lot of common ground. We are not the same. We have different histories and experiences and perspectives. We have different challenges in front of us. I mean, as Secretary Geithner said, I mean, part of our challenge is to save more and part of China’s challenge is to generate more demand for spending within the country.


But at root, I think we are pragmatic people. I think we set goals; we work to achieve those goals. I really am heartened by the positive tone of our meetings. And I think that laying this groundwork may not deliver a lot of concrete achievements immediately, but every step on this path to create confidence and understanding is a very good investment. And so what I’ve learned is that this Strategic and Economic Dialogue holds great promise.


MR. KELLY: And the last question to Mary Beth Sheridan from The Washington Post.




QUESTION: Hi, Secretary. Secretary Geithner talked about what for him was the most important thing that came out of these talks on the Economic Track, so I wondered if you could do the same on your track. And I also wondered if you specifically can talk about what came out of the conversations about the North Korean nuclear program.


SECRETARY CLINTON: One of the advantages that Secretary Geithner has is that he has very specific points to go over with his Chinese colleagues, and it’s all bilateral. Many of the hardest issues we discussed involve third parties and involve, obviously, regional and global challenges.


I would say three things. First, with respect to North Korea, State Councilor Dai has been very involved in North Korean policy in China for many years. He has a depth of understanding and appreciation for the difficulties of dealing with the North Korean Government. And we spent quite a bit of time talking in-depth about the Chinese perception both of North Korea but also of our interactions with them. And I found that very useful indeed.


I was also pleased that China shares our concerns about Iran becoming a nuclear weapons state. The potential for destabilizing the Middle East and Gulf is viewed similarly by the Chinese as it is by us if Iran, in its pursuit, triggers an arms race. And we had some very useful exchanges of information there.


And thirdly, we had many conversations in different settings on climate change and energy. And I think that the very clear description by the Chinese who were explaining what they are doing, which I’m not sure is as fully appreciated in our country as it needs to be – the kind of investments and the changes and the movement toward clean energy, and what they are willing to entertain and talk with us about – was an important step along the way toward Copenhagen.


There was much else that we discussed, but those three items come to mind.


QUESTION: Secretary Geithner --


MR. KELLY: Okay, thank you very much.


QUESTION: Six countries in six weeks, and you won’t take a question, please? (Laughter.)


SECRETARY GEITHNER: If the Secretary of State will allow me. (Laughter.)




QUESTION: Ma’am, with your gracious permission, thank you. I just wanted to ask you, we heard from Governor (inaudible) earlier saying that China would follow the United States in terms of exit strategies and withdrawing stimulus, that one of the signs that China would look for is when the U.S. starts to (inaudible). How do you address that, and is that appropriate?


SECRETARY GEITHNER: That seems about right to me. He said that in a private meeting, so that was an interesting way to say it. I think it just reflects the basic reality that in some ways we came into this earlier than anybody else. We’ve had a lot of adjustment already across the U.S. economy, so it’s more likely – largely, again, because of the strength of our policy response here – that we have a chance of emerging more quickly. And that will be a sign people look to. So that seems about right to me, I think.


Again, ultimately, we’ve got different challenges. And I’m sure the basic strategy we’ll each adopt in that context is going to be different on the fiscal and monetary policy side. Again, the basic importance of this is the recognition by both of us that things are going to have to change going forward. And if we’re going to make sure that, as I said earlier, we come out of this with a stronger foundation, a more balanced global economy, a more stable global economy, it’s going to require changes both in China and the United States, and that will shape our common strategy.


MR. KELLY: Okay, thank you.



PRN: 2009/793