WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner discussed the global economy and the state of financial markets on Tuesday with his Chinese counterpart, Vice Premier Wang Qishan, the Treasury said.
The brief statement from a Treasury spokeswoman made no mention of the historic Standard & Poor’s downgrade of the U.S. credit rating or of China’s investments in Treasuries.
“Secretary Geithner and Vice Premier Wang spoke by telephone today about both the U.S. and China, as well as challenges facing the global economy and the state of global financial markets,” the statement read.
Chinese state media have unleashed a barrage of criticism of U.S. fiscal policy and political gridlock since S&P cut the U.S. rating from AAA to AA-plus last Friday, saying the “good old days” of U.S. borrowing and spending were over.
The Xinhua news agency blamed America’s massive military spending and global footprint for the crisis, and called for an end to Washington’s foreign ”domineering thinking and deeds.
China is the largest U.S. foreign creditor, holding more than $1 trillion of $9.3 trillion in Treasury securities held by investors.
But Chinese government officials have remained publicly mute about the downgrade, and Beijing has not announced any action to diversify its $3.2 trillion in foreign exchange reserves away from dollar assets.
Geithner, in a CNBC/NBC television interview on Sunday, said he was confident China would continue to be a strong investor in the United States, adding that Treasuries were still just as safe as they were before the S&P action.
Geithner has led a Treasury effort to discredit the S&P move, saying the rating agency ignored a $2 trillion mathematical error and has “shown really terrible judgment” in its decision.
Reporting by David Lawder; editing by Chizu Nomiyama and Jeffrey Benkoe