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“Economic growth is facing notable downward pressure, some small and medium enterprises are facing a hard time and exporters are facing more difficulties,” Hu said yesterday at the Asia-Pacific Economic Cooperation CEO Summit in Vladivostok, Russia. “We have an arduous task of creating jobs for new entrants to the labor force.”
China is the biggest foreign buyer of U.S. debt, and the U.S. is the single biggest buyer of China's exports. Together, these two economic giants form the most important coupling in the global economy, but that relationship is now being threatened by mutual distrust, says Kenneth Lieberthal, director of the John L. Thornton China Center at the Brookings Institution.
Council on Foriegn Relations
Some economists question whether China's exchange rate policies vis-à-vis the United States and its use of U.S. dollar reserves can be considered "predatory"--designed to depress the value of the yuan and push cheap Chinese goods into U.S. markets.
Whitehouse.gov joint fact sheet
To address challenges to the global economic outlook, the United States and China pledge to enhance macroeconomic cooperation to work to ensure that the global recovery is durable and promotes steady job growth, and to establish strong, sustainable, and balanced future global growth. The United States and China commit to take comprehensive policy measures to achieve more balanced trade and expanded investment in each other’s economies. China wishes to increase imports from the United States, including in commercial high technology products.
One key benefit from this shift could be seen in what is called "trade rebalancing," says Michael Klein, a professor at Tufts University's Fletcher School and a nonresident scholar at the Brookings Institution. As the export-heavy Chinese economy dials back its trade surpluses, other countries could benefit, along with the Chinese people.
The U.S. and Chinese economies -- the world's largest and the fastest-growing major economy, respectively -- have become inextricably intertwined, locked in a kind of co-dependency that neither side thinks is particularly healthy, but which for the moment neither will move to break.
CHINA POLICY: Romney wants much of that bigger defense budget to build more ships for the Navy, with an eye on China’s rise. He would increase the Navy’s budget for warship construction BY a half-dozen more major vessels to be built every year — roughly a 66 percent increase over current policy. Obama, meanwhile, has “rebalanced” U.S. foreign policy toward Asia, taking a somewhat hawkish approach toward Beijing in the process. But Obama is less likely than Romney to view the U.S.-China relationship in adversarial terms. Both promise tougher economic measures toward China. But again, Romney proposes the harder line.
Republican presidential candidate Mitt Romney’s promise to get tough with China may fall on receptive ears in the U.S., but in China his vow has barely registered, much less caused alarm.