NEW YORK, USA – President and chief executive officer (CEO) of Bank of China, USA, Xu Chen, addressing the Vison China forum in New York, last Tuesday express the view that the United States and China must work together to advance mutual interests and, more importantly, promote world stability and prosperity.
Xu opposed the theory that China’s growing economic strength posed a threat to the US and therefore should be contained. Instead, he proffered that dual benefits of working together, sharing economic and social responsibilities as the world’s two largest economies, is mutually beneficial to both countries.
“China’s remarkable growth has offered great opportunities to the US, for China is now capable of sharing more ‘social responsibilities’ on the world stage and has become a stronger partner for the US. “Our two countries can take the world’s challenges and risks and contribute more to global economic growth, political stability and social progress,” he said.
Xu explained the historical benefits of China and the US working together to stabilize world markers and the Asian crisis.
In 1997, the Thai baht fell sharply and financial markets in Japan and Hong Kong were threatened with collapse. The Japanese yen fell to about 150-to-1 against the US dollar and that threatened other economies in the region. Had the Chinese yuan depreciated as sharply as the yen, the global economy probably would have fallen into recession, he said.
“China withstood the pressure of depreciation and even narrowed the floating range of the yuan against the US dollar,” Xu said. “China’s move helped East Asian countries stabilize financially and avoided the spillover of a current crisis.”
He added: In 2008, the collapse of the subprime mortgage market hammered the US economy and the Federal Reserve adopted Quantitative Easing to avoid a looming liquidity crisis, a problem China did not face.
“China had every reason not to echo America’s easy monetary policy,” Xu stated. “At that crucial time, China worked in concert with the quantitative easing measures of the United States by adopting a proactive fiscal policy and a prudent and moderately easing monetary policy from the standpoint of maintaining a stable global economic ecosystem.”
“If the US is willing to work together with China for mutual benefits and shoulder ‘state social responsibilities’ on the world stage, I believe that China will gladly work hand-in-hand with the US and jointly promote a more peaceful, stable and prosperous global community,” Xu said.