China Blames the U.S. for Global Financial Mess

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While the upcoming stimulus package has dominated domestic headlines, much of the rest of the world is focused on Davos, Switzerland, at the World Economic Forum.  Though President Obama is not personally attending, the U.S. has been a convenient scapegoat for many global leaders, including China's Premier Wen Jiabao.

During today's talks, Wen blasted the U.S. indirectly by references to "inappropriate macroeconomic policies of some countries" coupled with "prolonged low savings and high consumption."  A lack of banking regulations was also on Wen's list of grievances.

It doesn't take a political genius to catch the blatant reference to the U.S. despite discussing it specifically.  Treasury Secretary Timothy Geithner was far more specific in his criticism of China's currency valuation last week.

Despite these disagreements, the trade relationship between the U.S. and China remains far too significant to the respective economies, not to mention the global financial system, to let these remarks cause much friction between the two countries.

The Beijing government has a staggering $2 trillion dollars in U.S. debt, so a failing U.S. economy or weakened dollar would not bode well for China.  Similarly, a strong protectionist stance from either country could have detrimental results for both.

With so many joint interests, Chinese and U.S. leaders should mutually benefit from increased cooperation.

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