World Economy

China Tells US to Contribute More to Global Economic Growth

China Tells US to Contribute More to Global Economic Growth
China Tells US to Contribute More to Global Economic Growth

Chinese Finance Minister Lou Jiwei called on the United States to boost its domestic savings and investment to strengthen growth, including spending to improve infrastructure.

Speaking during the first day of the annual Strategic and Economic dialogue between the rival political and economic powers, Lou countered US pressure for China to stop relying on investment to power growth, Xinhua reported.

He pointed out that China's contribution to global growth is 30%, while the US, the largest economy in the world, added only 10%.

To enhance the world economy, he said, the United States should save more and turn that into productive investment, especially in infrastructure.

"We also hope that the United States accelerates its structural reform process and develops effective processes to increase labor force participation and then enhancing the savings rate," he said in a press conference, speaking through an interpreter.

"The United States should have a proper mechanism to mobilize more savings to direct investment. At the same time we would suggest that the US could use the opportunities of greater fiscal space to increase the investment in infrastructure."

By giving investment a "greater role" in growth, the United States could make a "great contribution to world economic development," he added.

Loosen Controls

The talks got under way in Washington with US Treasury Secretary Jacob Lew urging China to loosen controls on its currency and encourage more domestic consumption.

In two separate statements Lew also expressed strong concern about what he said was "Chinese government-sponsored" cyber-hacking of US companies to steal business information and technology.

"Such activity falls outside of the bounds of acceptable state behavior in cyberspace," Lew said.

The US business community says the issue has become paramount in bilateral economic and business relations.

Asked about it, Lou said it was a more appropriate subject for the security side of the annual talks.

"Cyber-security is not an issue to be discussed on the economic track," he said.

President Barack Obama was also preparing to meet key members of the Chinese delegation Wednesday ahead of a visit in September by Chinese President Xi Jinping.

US Vice President Joe Biden sharply warned Beijing that the world's waterways–which carry 80% of the planet's commerce–must remain open. "Responsible countries adhere to international law and work together to keep international sea lanes open for unimpaired commerce," Biden said pointedly.

The two major trading partners remain at odds over China's claims to much of the South China Sea and Washington has repeatedly urged Beijing to stop building artificial islands and resolve its numerous territorial claims peacefully. Nations that discard diplomacy and use coercion and intimidation to settle disputes, or turn a blind eye to aggression of others, only invite instability," Biden warned.

On Tuesday, welcoming the top delegation of some 400 officials also led by China's State Councilor Yang Jiechi for the seventh round of annual talks, Biden insisted Beijing must be at the table to help set up a new "rules-based system" in a rapidly changing world.

"There will be intense competition, we will have intense disagreements. That's the nature of international relations," Biden said. "There are important issues where we don't see eye-to-eye, but it doesn't mean we should stop working hand-in-hand," he said.