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U.S. Secretary of Treasury Jacob J. Lew Discussing U.S.-China Economic Relationship at Tsinghua SEM
Jul 13, 2020

On the afternoon of June 5, 2016, U.S. Secretary of Treasury Jacob J. Lew visited Tsinghua University School of Economic and Management (Tsinghua SEM), and engaged in a dialogue on U.S.-China Economic Relationship. The introductory remarks was given by Professor QIAN Yingyi, Dean of Tsinghua SEM, and the dialogue was moderated by Dr. YANG Yanqing, Deputy Editor-in-Chief of Yicai Newspaper and Managing Director of Yicai Research Institute.

In the introductory remarks, Tsinghua SEM Dean QIAN Yingyi welcomed U.S. Secretary of Treasury Jacob Lew to Tsinghua University and the School of Economic and Management. Dean QIAN introduced the Secretary’s career and educational backgrounds, as well as the history of Tsinghua SEM. Dean QIAN expressed that Tsinghua SEM is active in academic and policy research in economics and finance on issues relevant to China and the global economy.  The School regularly hosts academics and policy makers to speak and discuss on the critical issues facing the Chinese economy. Dean QIAN said that “We are particularly interested in research on the economic relationship between China and the U.S. in the global economy.  U.S.-China economic relationship is obviously the most important bilateral economic relationship today and has enormous impact on the global economy”. He cited figures to illustrate this point: "In 1981, China’s GDP was only 6% of the U.S.  Last year in 2015, it was nearly 60% of the U.S.  Moreover, the combined GDP of the two economies accounted for 36% of the world’s total. "He believed that the discussion with Secretary Lew will give the students and faculty of this important bilateral economic relationship from the U.S. perspective and provide food for thought for research at the School.


Tsinghua SEM Dean QIAN Yingyi giving the introductory remarks


During the dialogue, Secretary Lew has provided his views on range of issues including the 8th U.S.-China Strategic and Economic Dialogue, macroeconomic policy and excess capacity, G20 and WTO as well as other hot topics.


U.S. Secretary of Treasury J. Lew discussing U.S.-China Economic Relationship at Tsinghua SEM


U.S.-China Strategic and Economic Dialogue


The 8th U.S.-China Strategic and Economic Dialogue will begin soon after in Beijing. With regards to the achievements and challenges encountered during the development of the U.S.-China Strategic and Economic Dialogue, Treasury Secretary Jacob Lew stated that the Dialogue has played a significant role, bringing together the leaders of both countries to discuss many important issues. China and U.S. have obvious areas of overlapping interest and have real tension in other areas, which will require engagement on the issues and working through them. If there is no dialogue mechanism, a lot of conversations between China and the U.S. will become very difficult. Looking ahead, there will be an additional set of issues both China and the U.S. would need to engage in the same way, and the U.S.-China Strategic and Economic Dialogue will provide a good opportunity for conversations.


Macroeconomic Policy and Excess Capacity 


When discussing about the exchange rate of RMB, Treasury Secretary Jacob Lew expressed that the RMB exchange rate formation mechanism should be more market-oriented. It's a very important in terms of the U.S.-China relationship to take a very analytic view on the exchange rate issue. This view, Secretary Lew thinks, will over time deepen the trust between the two countries and the relationship between the two countries. He warmly welcomes economies like China to enter the U.S. market, but would find it very troublesome from an American perspective if products from the two countries could not compete fairly if there was a deliberate policy to drive down the value of the currency to make a competitor's products less expensive. When it came to the discussion on the US dollar, Secretary Lew expressed that he does not make prediction on exchange rate for any currency including the US dollar. He hopes the countries around the world would introduce appropriate policies, including monetary and fiscal policies that drive growth in their economies. When China's overcapacity problem was mentioned, Secretary Lew said "I think the real issue here is where their excess capacity is, and where are their subsidies that are driving excess capacity”. He believes that, leaving aside the competitiveness issues and only looking at the impacts on the Chinese economy, overcapacity will ultimately be corrosive to economic efficiency of a country by causing misallocation of resources. It is unhealthy for an economy’s long term growth to sell things at a price that is below what the world market price would otherwise be.


U.S. Secretary of Treasury J. Lew discussing U.S-China Economic Relationship at Tsinghua SEM


 G20 and WTO


This year’s G20 summit will be held in Hangzhou, China in August. Treasury Secretary Lew expressed that during the G20 Finance Ministers and Central Bank Governors Meeting hosted in Shanghai few month ago, China reaffirmed to the world’s economic and financial leaders that China has a solid basis for effective management and control of its reforms.


Speaking of the World Trade Organization (WTO), Secretary Lew believes that WTO still play a significant role. When there is a policy discussion, it is relevant to make sure that countries’ actions are consistent with WTO standards and comply with any international agreements, this should hold true for any countries that are in the WTO.



U.S. Secretary of Treasury J. Lew discussing U.S.-China Economic Relationship at Tsinghua SEM


Students from Tsinghua SEM asked questions regarding U.S. fiscal policy, bilateral investment treaties, the role of bilateral cooperation during the negotiation of global climate agreement, the development of internet finance, as well as other questions, all of which Secretary Lew answered. He also stated that there are many areas that China and U.S. could cooperate together, as well as hoping the students should continue to expend their perspective during their career development, doing what real interest them, and build a better world together. 


Tsinghua SEM students asking Secretary Lew questions


Jacob J. Lew served as the 76th U.S. Secretary of Treasury in February of 2013. Prior to this, he had served as White House Chief of Staff, Director of the Office of Management and Budget, Deputy Secretary of State for Management and Resources. Jacob Lew had also served as the Executive Vice President for Operations at New York University, as well as the Chief Operating Officer and the head of two business units at Citigroup. During the period of 1998 to 2001, when he was the serving as President Clinton's White House Office of Management and Budget Director, the US federal government achieved three consecutive years of budget surpluses. Jacob Lew received his B.A. from Harvard University and his Juris Doctor (JD) from Georgetown University.



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