Washington, DC: Rapid growth of emerging economies like India, China and Brazil is boosting the American exports, US Treasury Secretary Timothy Geithner has said.
“Emerging economies like China, Brazil and India are growing very rapidly. That growth is helping to support rapid growth in US exports, which in turn is raising income and employment across the United States in manufacturing and high tech and agriculture,” Geithner said in his testimony before the Senate Foreign Relations Committee.
The US, he said, was working in the G-20 to help build consensus on long-term reforms that would provide the foundation for a more balanced, more stable global economy.
“We lay out a framework for cooperation that includes movement to more flexible exchange rates by emerging economies, a type of early warning mechanism to help reduce the risk that we see the reemergence of large external trade imbalances, and help for emerging economies to manage the challenges to come with large flows of capital,” he said.
“A second priority — we’re working very hard to build a more stable international financial system with better oversight of the major global financial institutions — the major banks — and the global financial markets,” Geithner noted.
Geithner said the US was trying to make sure that China and other countries understand that America was going to change how it grew as a country.
“We’re not going to base future growth in the United States on consumption fuelled by borrowing from other countries. Our growth in the United States is going to come much more from investment and from exports, not from unsustainable financing of housing booms, excess consumption. And that changes the reality those countries face,” he stressed.
The Treasury Secretary said the global economy was now expanding after the profound crisis of the last three years, but the recovery was advancing at different speeds.
The IMF forecasts that emerging markets will grow by 6.5 percent this year, while it expects growth in Europe and Japan to be 1.5 percent.