US-China cooperation "fundamental" for both countries: US expert

• Source: Xinhua
• [18:55 November 11 2009]
• Comments

Both the United States and China have fundamental interests in cooperation, and President Obama's upcoming visit to China would try to look for "common ground" rather than confrontation, an expert on the US economy told Xinhua in a recent interview.

Steven Hess, vice president and leader of the sovereign rating team of leading rating agency Moody's Investors Service, is in charge of the credit rating of the US government. His recent comment that the United States may loose its 3A rating if it can't lower its deficit to a sustainable level in the next three to four years was widely reported.

Meanwhile, he has been rating Hong Kong and Macau for more than a decade and has visited Chinese mainland dozens of times.

Hess, familiar with both the US and Chinese economies, said each country had issues to discuss, notably for the United States, the Renminbi exchange rate and China's foreign exchange rate policy, and for China, trade disputes such as the recent tariffs on tires.

"But overall, I think the fundamental interests of both countries are to build a cooperative relationship," Hess said, "Because now China is probably going to be the second largest economy in the world, US is the largest. For them to not have good economic relations would not be good for the world economy."

Hess said he imagined President Obama would try to find areas of common ground for both countries during his visit to China later this month.

Obama was not going to be confrontational while he was in China and his visit should be positive for bilateral relations, Hess said.

It looks like consumption has grown rapidly in China even in the current slowdown, he added.

"China also has a big stimulus package and, therefore, investment is going up again very rapidly as a proportion of GDP. But I think, going forward, China will rely more on consumption than exports for economic growth," Hess said.