Geithner Goes To China: Will He Soothe Or Spark?
• NPRTimothy Geithner's first trip to China as treasury secretary comes at a vulnerable time for the Obama administration. Mired in a brutal recession, the United States needs Beijing to buy more American goods, allow its currency rise and make other moves to narrow an enormous trade gap. The U.S. also needs China's help to confront any military threat from North Korea. Yet Washington's leverage has waned just as China's power over the U.S. has grown. China is now America's biggest creditor. As of March, it held $768 billion of Treasury securities — about 10 percent of publicly traded debt. The U.S. needs China's money to finance U.S. budget deficits, which are soaring as Washington tries to end the recession and bolster the banking system. The administration estimates the budget deficit will hit $1.84 trillion this year. That's four times last year's deficit.
