After a last-minute invitation from Chinese Vice Premier Wang Qishan, US Treasury Secretary Timothy Geithner is set to visit China today to discuss bilateral economic issues.
There's plenty to talk about. Despite releasing a letter ahead of this weekend's G-20 finance ministers meeting in South Korea calling for countries with consistent surpluses to 'to undertake…exchange rate policies to boost domestic sources of growth and support global demand,' the White House failed to secure support for a proposal to limit current account imbalances to 4 percent of GDP.
However, Reuters also reported that: 'US officials were happy that the communique at the end of the meeting 'committed G20 members to "refrain from competitive devaluations" of their currencies and to pursue a full range of policies to reduce excessive external imbalances.'
Geithner is expected to keep up the pressure over claims the Chinese currency is heavily under-valued when he meets with Wang–who is in charge of China's economic, energy and financial affairs–in Qingdao.
Also on the agenda is likely to be the question of China's exports of rare earth metals. There have been claims that China has cut exports of the metals, which are vital to technology firms and are used in everything from computer monitors to pharmaceuticals, to countries including the US. China produces about 97 percent of the world's output of the specialist metals and there are fears that it may be using the export quotas as an economic weapon. This fear is particularly pronounced in Japan, something The Diplomat will be looking at more closely this coming week.
In the meantime, though, it will be interesting to see what comes of the Geithner-Wang meeting. After all, it's not likely to be all one-way traffic. As Reuters also noted at the G-20 meeting: 'The United States itself came under fire from Germany and China for the super-loose monetary policy stance it has adopted to try to breathe life into the sluggish US economy.'