The U.S. might have taken a sigh of relief when China agreed to pursue currency flexibility and increased domestic consumption. However, this time around this is nothing but exuberance in air as China will not do it in haste at any cost. On the other hand the U.S. will aim to increase national savings in an effort to decrease global imbalances. Both the countries have agreed to the above mentioned prepositions respectively in the ongoing strategic economic dialogue between these two countries. However the recent development cannot be dubbed as a major breakthrough, though it has opened up the avenues for further talks.
Henry Paulson, U.S. Treasury Secretary, has pointed out the much expected version saying that the differences cannot be resolved in a single meeting however, the conversation held here will make progress more achievable. The U.S. Treasury Secretary however maintained that the high level talks between the countries have been ‘very frank and productive’.
As the world knows the prime concern of the U.S. was to bring China to take steps to make its currency more flexible by allowing it to be linked with the global market. On the other hand, Chinese establishment has made it clear that it would take gradual process to bring flexibility in its currency owing to the pressing need to protect farmers and poor people.
