WASHINGTON: 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 here the other day.
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 and CEO 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 the economic power 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.
“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.
