China Ink

Visiting the bank manager

Tim Geithner was in Beijing at the beginning of the week on a mission to reassure.

So into the lion’s den…

The Beijing-based Global Times was waiting with a survey of 23 Chinese economists, 17 of which deemed it “risky” to be holding US bonds. On the other hand, at least a majority of the survey was still against selling them.

Chinese students listening to a Geithner speech at Peking University also seemed to forget their Confucian respect for elders, openly tittering when he assured them that “China’s assets are very safe” in US Treasury bonds.

It’s true that Geithner is now the “world’s most important bond salesman”, says the Wall Street Journal. But the newspaper seemed to have sympathy for the Treasury Secretary too, especially when he talked about American objectives in restoring fiscal sustainability; “Promising that with a straight face is called taking one for the Obama team,” noted the newspaper.

And his efforts were appreciated?

Sections of the press noted Geithner’s brief words of Mandarin and his crowd-pleasing Chinese idiom of a “joint effort in a concerted way.”

But China Business News regarded it all as a “feeble sales pitch” pointing out the dollar is down 1.5% in the past month, its worst performance since 1985. The Beijing News asked how Geithner was going to get the US budget deficit back to 3% of GDP, and the 21CN Business Herald agreed the dollar was on a long term slide. While Geithner was talking up prospects in Beijing, back in the US the government was printing money, complained ChinaStakes.com.

The Financial Times thought Geithner was right to get out there and make his case, so at least he could avoid the impression of being seen as an “incorrigible wastrel, summoned to see his suspicious bank manager.”

In fact, the international press was generally complimentary on Geithner’s efforts, noting that he played a difficult hand as well as he could, and also laid the ground for future dialogue. He made sure that he commended Beijing’s stimulus package and even managed to get in a reference to the yuan exchange rate without upsetting his hosts.

Generally the tone seemed different?

Yes. Geithner’s approach to communication was as much discussed in the Chinese media as what was actually said.

Now that he’s gone, the knives seem to be out for Geithner’s predecessor Hank Paulson too. Zhou Shijian, writing in the Global Times, says that, whereas Paulson was a fox, Geithner is more of a mule. This – apparently – is a compliment.

The Associated Press seems to agree that a change in style is underway; “Gone is Hank the hammer and in his place is Tim the mild bureaucrat.” Although Paulson set up the Strategic Economic Dialogue with the Chinese, “most of the talking went one way.”

Peter Foster, writing in the Daily Telegraph in the UK, thought Geithner’s tone “respectful, even ingratiating”. But he also points to the significance of a new ampersand. Now it is the Strategic & Economic Dialogue, with the biannual meetings intended to cover a lot more than just trade. It suggests that the Obama administration is serious about widening dialogue with China.


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