Obama Meets With Chinese Foreign Minister

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China's Foreign Minister Yang Jiechi met with President Barack Obama at the White House Thursday, another sign the two rival world powers are ready to work together at a time of heightened economic danger. The meeting comes after tension over an incident involving Chinese and U.S. ships in the South China Sea.

ROBERT SIEGEL, host:

The foreign minister of China, Yang Jiechi, met with President Obama at the White House today and was another sign that the two rival world powers are ready to work together at a time of heightened economic danger. Tensions between the U.S. and China rose after a weekend incident in the South China Sea when five Chinese ships got into a scrape with a U.S. surveillance ship. Foreign Minister Yang and President Obama both seemed anxious to put that incident behind them today and talk about their economic partnership and joining us now to talk about it is NPR's Tom Gjelten. Hiya.

TOM GJELTEN: Hi, Robert.

SIEGEL: The foreign minister met yesterday with Secretary of State Clinton. Clearly the U.S. China relationship is getting a lot of attention. What's behind all that?

GJELTEN: Robert, this is such a high stake relationship for both sides. You know, this incident in the South China Sea is not one that we should underestimate. China takes the territorial integrity of its waters very seriously and the United States is determined not to let them push too hard on that. On the other hand, I think what's significant, as you say, is how hard both governments really pushed in the last couple of days to put this incident behind them. They do want to focus on their economic relationship.

We're talking about here the number one and number two economies in the world, at least by one measure, and a very high degree of interdependence. The United States now owes China more than a trillion dollars, if you include both treasury notes and agency bonds, referring to like Fanny Mae and Freddie Mac, and so forth. Meanwhile, China depends on the United States as its main trading partner, so both of these countries really want to keep the focus on their economic relationship, and they are looking ahead to the G-20 meeting in three weeks when President Obama will be meeting with Chinese President Hu Jintao.

SIEGEL: This colossal asymmetric relationship in which we borrow, they lend, we consume, they produce. They're looking ahead to the G-20 meeting. What do the two countries really hope to achieve there? What are their priorities?

GJELTEN: You know what's interesting, Robert, is that the United States and China are of one mind as far as this G-20 meeting is concerned. They both agree that stimulus spending is very important. They are the only two governments in the world, according to the International Monetary Fund, who are now devoting at least two percent of their gross domestic products each year to stimulus spending, and they will present a common front at this G-20 meeting arguing that all governments in the world should do more to boost stimulus spending in order to promote global economic demand.

SIEGEL: Now, there is a long running irritant in U.S. Chinese economic relations and at his confirmation hearing earlier this year, Treasury Secretary Geithner addressed it when he said that China is keeping its currency artificially low in order to boost China's exports sector. The Chinese weren't pleased with that. What's become of that controversy?

GJELTEN: That was dropped very quickly. The Obama administration has been very careful not to reiterate that complaint. They have said that this actually, as you say, is just an old complaint on the part of the United States and one that Barack Obama himself as a candidate mentioned, but one of the reasons that they are being so careful about this is there is actually a law that requires the Treasury Department to report to Congress any evidence of currency manipulation, and the deadline for that report is in April.

The United States does not want to find itself - the Obama administration -does not want to find itself in the position of having to give a negative report on that issue just at the time when cooperation with China is so important.

SIEGEL: Thank you, Tom.

GJELTEN: You're welcome.

SIEGEL: NPR's Tom Gjelten.

NORRIS: You're listening to ALL THINGS CONSIDERED from NPR News.

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