Gold­man’s Blank­fein ex­pects US econ­omy to grow 3%

China Daily (Canada) - - FRONT PAGE - By CHEN JIA chen­jia1@chi­nadaily.com.cn

Eco­nomic growth in the United States will see a slight re­cov­ery to 3 per­cent this year, com­pared with 2.4 per­cent last year, the top of­fi­cial of a lead­ing US bro­ker­age said on Wed­nes­day.

Though the delever­ag­ing in the US con­sump­tion and fi­nan­cial sec­tor af­ter the eco­nomic cri­sis took longer than ex­pected, the lower un­em­ploy­ment rate sug­gests that the worst might have passed, said Lloyd Blank­fein, chair­man andCEO of Gold­man Sachs, at an event in Ts­inghua Uni­ver­sity.

“I am op­ti­mistic about the fu­ture econ­omy,” he said, adding that there would be some com­plaints about the gov­ern­ment’s poli­cies dur­ing the up­com­ing pres­i­den­tial elec­tions.

Re­spond­ing to queries on the Bei­jing-led Asian In­fra­struc­ture In­vest­ment Bank, Blank­fein said it was im­por­tant for China to ex­pand its role in the global gov­er­nance sys­tem.

The new lender, which is fo­cused on fi­nanc­ing in­fra­struc­ture con­struc­tion in Asia, has 57 prospec­tive found­ing mem­bers, with the US be­ing the no­table ab­sen­tee.

“I think the US made a mis­take, and it should be more open to the idea,” said Blank­fein. “Also we should wel­come the changes in the vot­ing rights in global or­ga­ni­za­tions such as the IMF.”

China’s move­ment into the up­per reaches may be the top line of eco­nomic power in the world. Though it is the re­al­ity, it does not mean that it is all about ben­e­fit­ing China. In­stead it means re­spon­si­bil­i­ties and ca­pa­bil­i­ties in a man­ner that China can jointly un­der­write the global eco­nomic or­der, ac­cord­ing to Blank­fein.

He stressed that the global gov­er­nance struc­ture of the post -World War II or­der needs to be read­justed based on changes.

Qian Yingyi, direc­tor of the School of Eco­nomics and Man­age­ment at Ts­inghua Uni­ver­sity, said that both China and the US need more com­mu­ni­ca­tion at var­i­ous lev­els, es­pe­cially driven by dia­logue be­tween top lead­ers, to fur­ther en­hance co­op­er­a­tion in eco­nomic and po­lit­i­cal as­pects.

The Bi­lat­eral In­vest­ment Treaty, an agree­ment be­tween the two coun­tries that seeks to open in­dus­tries for bi­lat­eral di­rect in­vest­ment, will be a cru­cial step in bol­ster­ing Sino-US re­la­tion­ship, ac­cord­ing to Qian.

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“Com­pa­nies should take ad­van­tage of the in­vest­ment treaty and use it to make tan­gi­ble con­tri­bu­tions for closer co­op­er­a­tion be­tween the two na­tions,” said Blank­fein.

How­ever in the short term, it may not be that easy to reach a con­sen­sus, he said.

For the US, some in­dus­tries that are not so suc­cess­ful may lose in the com­pe­ti­tion with Chi­nese com­pa­nies, and it will re­sult in un­em­ploy­ment.

At the same time, the open­ing-up can also help en­rich the US mar­kets with more sup­plies of man­u­fac­tured prod­ucts, and thereby help re­duce US in­fla­tion, he said.

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