Geithner, Wang discuss economy, G-20 in meeting

US Treasury Secretary Timothy F Geithner and China’s Vice Premier Wang Qishan, in talks today in Qingdao, China, discussed ties between the world’s two largest economies and prepared for a summit of Group of 20 leaders in South Korea next month.

“The two sides exchanged views on US-China economic relations and the preparation for the leaders’ summit in Seoul,” the US Treasury Department said in a statement a day after a meeting of Group of 20 finance ministers and central bankers in Gyeongju, South Korea.

Geithner was joined at the two-hour lunch meeting by Lael Brainard, the Treasury’s undersecretary for international affairs, and David Dollar, the department’s economic and financial emissary to China. Geithner departed for Washington after the meeting.

The US Treasury chief’s visit follows a joint stance from G-20 finance officials on exchange rates as they sought to end concern that nations are relying on cheap currencies to spur growth, risking a protectionist backlash.

The G-20 agreed to “move towards more market determined exchange rate systems that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies,” according to its post-meeting statement. At the Korea meetings, Geithner said it was important that China continues with “very promising” efforts to allow a strengthening of the yuan. The nation played a “very constructive” role in this week’s G-20 talks, he said.

The global economy still faces “very substantial economic challenges,” Geithner said, and he called for a continued “gradual” appreciation of emerging-market currencies against their advanced economy counterparts.