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Bush urges China to spend, spend, spend
2007-09-05
US President George W. Bush called Wednesday on Chinese consumers to spend more on American products to help reduce China's surging trade surplus with the United States. "Certainly I hope that China changes from a saving society to a consuming society," Bush told reporters ahead of the annual summit of the Asia Pacific Economic Cooperation forum. "We want the (Chinese) middle class to be comfortable coming into the marketplace, the global marketplace, so that our producers can see the benefits directly with trade with China." China's enormous trade surplus with the United States is a regular bone of contention in bilateral relations, with widespread American claims that jobs are being lost to the massive Chinese exporting machine. The gap with China, which has the lion's share of imports into the United States, expanded to a record 21.16 billion dollars in June from 20.02 billion in May, according to US official data. Most US criticism of the surplus is focused on the value of the currency, said to be kept artificially low, but Bush addressed the high Chinese savings rates instead. "Right now because of the lack of a (social) safety net, many Chinese save for a rainy day," Bush said. "What we want is for the government to provide more of the safety net so they can start buying more US and Australian products." Economists have argued that a more expensive Chinese currency would not do much to shrink the overall US deficit as American importers would just move to other low-cost suppliers in different parts of the world. They have argued that core issues include the unwillingness of the Chinese people to spend more on consumer goods, and conversely, an unwillingness on the part of many Americans to save.
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