China's development benefits United States: Federal Reserve chairman

The United States Federal Reserve Chairman Ben Bernanke said Friday that China's development has benefited the United States.

"China's development and its opening up to the global economy have also benefited the United States in many ways," said Bernanke in a speech at the Chinese Academy of Social Sciences, a think tank for the Chinese government.

This is Bernanke's first visit to China since he took office as U.S. Federal Reserve Chairman on Feb. 1 this year.

He was with a high-profile U.S. trade delegation to the first China-U.S. Strategic Economic Dialogue which ended here at Friday noon.

Bernanke said China is now the second-largest source of U.S. imports. "These imports boost U.S. real incomes by allowing U.S. households to purchase consumption goods and U.S. firms to purchase intermediate inputs at lower cost," he said.

"China is also a growing market for investment and exports by U.S. firms," said Bernanke, "since China joined the WTO (World Trade Organization), U.S. exports to China have more than doubled."

Bernanke agreed that as China develops further, its households and firms will demand a greater variety of goods and services, enhancing opportunities for producers in industrial countries, including the United States.

He described the China-U.S. economic relationship as "of extraordinary importance", saying both countries "have much to gain from interactions with each other".

"Serious challenges exist as well, requiring both countries to address such areas as energy, the environment, intellectual property rights, and global imbalances," said Bernanke.

Bernanke suggested more flexibility of RMB, Chinese currency, and reduction of China's domestic saving, saying these are both helpful to Chinese and the world economy, while stressing that the U.S. must avoid protectionism.

The two-day dialogue ended with a series of agreements reached, including one facilitating financing to support U.S. exports to China and another re-launching bilateral air services negotiations beginning in January 2007.

Source: Xinhua