WASHINGTON – In
an op-ed to be published in the November 12, 2013 edition of The Wall
Street Journal Asia, Treasury Secretary Jacob J. Lew previews his visit
this week to Tokyo, Singapore, Kuala Lumpur, Hanoi, and Beijing and discusses
how advancing complementary economic reforms in Asia and the United States can
help pave the way for a strong, balanced, and sustainable global economy that
expands economic opportunities for citizens in both the U.S. and Asia.
Read the piece online.
The text of the piece
A U.S.-Asia Agenda for
Both sides ought to work toward rebalancing global growth for long-term
The United States and Asia are two
vital pillars of the global economy. These are important times as we pursue
pro-growth policies and chart a course to expand opportunities for the next
generation. Policies we each pursue have a substantial impact on one another. I
am here in Asia this week to deepen our cooperation to increase demand, provide
shared benefits throughout the global economy and level the playing field for
our workers and businesses.
That is why we must complete the
process of rebalancing global growth. With emerging economies playing an
increasingly large role in the global economy, we must move away from a pattern
of global growth that is built on the U.S. being the world's importer.
Since the global financial crisis,
the imbalances of the U.S. and Asian economies have adjusted significantly.
However, some of the correction has come from ongoing weak demand in the
advanced economies. The process of global rebalancing remains incomplete. And
as Asian countries that have grown more on the basis of domestic demand now
take steps to increase their resilience, it is all the more important for
Asia's surplus economies to draw on domestic sources for growth and move toward
greater exchange rate flexibility.
China is undergoing a systemic
transition toward domestic consumption, and away from resource-intensive export
growth. These efforts are imperative to sustain strong growth in the medium
term. At the same time, China needs to move more quickly to a market-determined
exchange rate and more open access to its markets.
There are some signs of progress on
the horizon. China's current account surplus has fallen. Beijing has committed
to pursue a high-standard bilateral investment treaty that includes all sectors
with the U.S. The Shanghai Free Trade Zone pilot could lead to more open
investment. We and the world will be watching closely this week as the Chinese
leadership announces its new plan for reforms.
In Japan, Prime Minister Shinzo Abe
has promised three arrows of reform. While we welcome an end to deflation, to
achieve sustained success Japan needs to strengthen domestic demand growth,
avoid simple reliance on exports, and continue to respect G-7 and G-20 commitments
not to target exchange rates. Structural reforms and a carefully calibrated
fiscal adjustment will be key to supporting the ongoing recovery in demand so
that Japan can realize lasting growth.
Recently, some emerging markets in
Asia have slowed as the post-crisis stimulus wanes. There has long been a
recognition that macroeconomic policy in the U.S. and other advanced economies
will eventually return to normal as growth strengthens. Asian economies should
now accelerate reforms to increase resilience against shifts in capital flows,
and to address structural constraints to growth. We have already seen that
economies that are undertaking reforms are better positioned to manage this
In the United States, while there
is still more work to do, our economy is slowly rebounding. Five years ago, we
confronted a devastating financial crisis that triggered the worst recession
since the Great Depression. Beginning in 2009, President Barack Obama's
administration reformed, repaired and recapitalized the financial sector. We
acted decisively to provide fiscal support for jobs and private demand. While
long-term fiscal policy requires tough decisions, and we have made many hard
fiscal choices, we knew we could not cut our way to prosperity. In 2010, as the
recovery slowed, it was clear that the economy needed additional help to gain
strength in the face of headwinds from abroad, and we acted again through a
temporary cut in the payroll tax.
Because of these measures and
notwithstanding the recent political headwinds, we have been moving in the
right direction. Since 2009, our economy has been expanding. Over the past 44
months, private employers have added 7.8 million jobs in the United States.
Over the last year alone, our businesses have added more than 2 million jobs.
Manufacturing is recovering, and the housing market has improved.
After difficult budget
deliberations, we reduced spending, and moved to higher tax rates for top
earners. The federal deficit fell to 4.1 percent of GDP for the fiscal year
that just ended, less than half what it was four years ago. On top of that, we
are experiencing an energy revolution in America. We produce more natural gas
than at any time in history.
Now, we need to build on these
strengths and deepen our ties with the most dynamic region in the world. The
Trans-Pacific Partnership is the cornerstone of our shared growth agenda,
creating new opportunities for boosting trade, investment and innovation. It is
envisioned as a "living agreement" that other Asia-Pacific economies
willing to take on the high standard TPP obligations can join.
The United States and Asia share
the same hopes about the future, where our citizens have greater economic
opportunities. By advancing reforms in our respective countries that are
complementary, together we can pave the way for a strong, balanced, and
sustainable global economy.
Jacob J. Lew is the United
States secretary of the Treasury.