[Title] Remarks at U.S.-China Strategic and Economic Dialogue Strategic Track Plenary Session One (By Treasury Secretary Timothy Geithner)

SECRETARY GEITHNER: I want to start by joining Secretary Clinton and my U.S. colleagues in welcoming the Chinese delegation. Vice Premier Wang and Councilor Dai, it’s good to see you again in Washington.

When the Strategic and Economic Dialogue first met in Washington two years ago, President Obama said the United States and China share mutual interests; if we advance those interests through cooperation, our people will benefit and the world will be better off because our ability to partner with each other is a prerequisite for progress on many of the most pressing global challenges.

Now we have worked carefully and deliberately since then to demonstrate that basic truth, and our economies are stronger today because of the commitment of President Obama and President Hu to deepen our economic relationship even as we each confront significant economic challenges at home. I want to compliment Vice Premier Wang for his leadership in this joint effort. He is a tough and forceful defender of China’s interests. He focuses on the practical and the achievable. And he recognizes that China’s economic success depends on a growing world economy and a strong relationship with the United States.

When President Obama and President Hu launched the Strategic and Economic in London of April – in April of 2009, the world economy was in the grip of the worst financial crisis since the Great Depression. Today, thanks in no small part to the actions of the United States and China, we have put out the worst of the financial fires and the world economy is growing again. And because of the success of the cooperative strategy we launched together with the G-20, world trade is now expanding rapidly, companies around the world are investing in hiring, and fears of deflation have receded.

But of course, we still face very significant though very different economic challenges at home. In the United States, even after a year and a half of positive economic growth and more than 2 million private sector jobs created, unemployment is still very high and we still have a lot of work to do here in repairing the damage caused by our crisis. Our challenge in the United States is to strengthen the foundations for future economic growth, and this requires a sustained effort to improve education, to strengthen incentives for innovation and investment, even as we put in place the long-term fiscal reforms that will force us once again to live within our means as a nation.

In China, building on the remarkable reforms of the last 30 years, the challenge is to lay a foundation for a new growth model driven more by domestic demand with a flexible exchange rate that moves in response to market forces with a more open, market-based economy and a more developed and diversified financial system.

The reforms we must both pursue to meet these very different challenges are not in conflict, and the strengths of our economies are still largely complementary. And we each recognize that our ability to work together is important to the overall health and stability of the global economy.

As President Obama said, no one nation can meet the challenges of the 21st century on its own nor effectively advance its interests in isolation. There’s a Chinese saying that reflects this same vision. In Chinese, it reads – (in Chinese). In English, roughly, for share fortunes together, meet challenges together. We are making progress and I am confident we will continue to do so.

Thank you. Councilor Dai. (Applause.)