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China, US pledge to cut trade imbalances

CHINA yesterday pledged to allow more flexibility in its exchange rate regime, and the United States promised to increase national savings rates in a joint effort to reduce trade imbalances. D@4pii7I

q9uU ?t8mB$V{ v$Q Wrapping up a high-level economic dialogue in Beijing, government representatives also agreed that the New York Stock Exchange and NASDAQ would open offices in China. !n
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In addition, the two nations concluded a deal facilitating financing to support US exports to China and agreed to relaunch negotiations on air services in January. E/]6m-l(O O
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9F8@ q(d5T'a The two-day session was aimed at examining the strategic issues affecting trade relations between the two countries. pNd0A.C K/X:S$T c

C5NF"MT;]J The US delegation was headed by Treasury Secretary Henry Paulson and included several other Cabinet secretaries and Ben Bernanke, chairman of the US Federal Reserve.
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The session was co-chaired by Chinese Vice Premier Wu Yi and Paulson. President Hu Jintao and Premier Wen Jiabao also met with Paulson and the US delegation in Beijing yesterday.
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W(M6` C.A "The dialogue not only helps improve Sino-US economic and trade cooperation, but it also has a positive impact on development of the regional and world economy," Hu said. "d qy\4``p:T

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qx Vice Premier Wu told reporters after the session that the two countries reached consensus on a number of points, "although we maintain different views on some issues."
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Y+Msl7x(A6^ Paulson also cited progress, saying, "It is important and encouraging that we have agreed on so many principles in the dialogue." *s$~2B u5B8X2o0O!K

]dd-C)F{{/q4|r\ Later yesterday Bernanke praised China in a speech to the Chinese Academy of Social Sciences. %\2xc` Ae*U)B
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"China's development and its opening up to the global economy have benefited the United States in many ways," he said. -] clWL5XN


|F@Ch!OQf Bernanke said China is now the second-largest source of US imports. "These imports boost US real incomes by allowing US households to purchase goods and US firms to purchase intermediate inputs at lower cost," he said.
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n6~ J%ce5X O "China is also a growing market for investment and exports by US firms. Since China joined the WTO (World Trade Organization), US exports to China have more than doubled."
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Bernanke agreed that as China develops further, its families and companies will demand a greater variety of goods and services, enhancing opportunities for producers in industrial countries, including the United States.
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vN;? h DieF:m%e He described the China-US economic relationship as one "of extraordinary importance," saying both countries "have much to gain from interactions with each other." -tA+W]a ]"q{&p Tsh
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"Serious challenges exist as well, requiring both countries to address such areas as energy, the environment, intellectual property rights and global imbalances," Bernanke said. 3} ?M8V ?8~
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The Fed chief suggested more flexibility in China's currency and a reduction in its domestic savings, saying movement on both tracks would help the Chinese and the world economy. He also stressed that the US must avoid protectionism. BQZpi

F{!l'p-CK+e7m)c The US delegation was the highest-profile trade mission the United States has ever sent to China.