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Geithner: China must speed currency reform, address intellectual property issues
The United States, he said, lies at the crossroads of those divergent paths: Its economy is likely to grow at only half the rate of major emerging economies, but twice as rapidly as Japan's and Europe's.
"These growth dynamics will fundamentally change the balance in the world economy, forcing changes in the architecture of the trade and financial systems," Geithner said.
Although China will play a significant role in that changing architecture, and although its economic policies undoubtedly will affect the fortunes of the United States, Geithner said, America's economic fate ultimately rests largely in its own hands.
"The prosperity of Americans depends overwhelmingly on the economic policies we pursue to strengthen American competitiveness," he said. "We need to understand that our strength as a nation will depend not on choices made by China's leaders, but on choices we make here at home."
A key part of that challenge will be restoring fiscal responsibility, Geithner said, foreshadowing a policy debate that is certain to take center stage in Washington in coming months. He said the government must find ways to spend less, and in time must devise a simpler, more equitable tax system.
Geithner said those key challenges, as well as others such as investing in research and development, educational reforms, and public infrastructure, are fundamental to the country's success.
"They are not just an economic imperative, they are a national security imperative," Geithner said. "Our strength as a nation depends on the ability of our political system to move quickly enough to put in place solutions to our long-term problems."