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Treasury Notes

 Year In Review: Secretary Lew and the Global Economy

By: Holly Shulman

Secretary Lew’s first year at Treasury included significant interaction with his counterparts abroad, focused on promoting financial stability, accelerating economic growth and enhancing trade and investment. From China to Europe, and in meetings with his counterparts from around the world, the Secretary emphasized policies to grow the U.S. and global economy, level the playing field for American workers and businesses and to create jobs.

A few weeks after Secretary Lew took office, he traveled to China in March to meet with the country’s new leadership and senior economic officials to discuss the bilateral relationship with the U.S., opportunities for cooperation and growth and efforts to level the playing field and create new opportunities for U.S. workers and businesses.  Secretary Lew was the first foreign official President Xi Jinping (photo below) met since assuming power and the Associated Press reported their meeting was also “the first high-level exchange between the sides in six months and the start of a series of meetings that will test the potential for cooperation between the world’s first- and second-largest economies.”

In advance of his visit to China, Secretary Lew spoke at John Hopkins University School of Advanced International Studies, emphasizing the need for global rebalancing: "[We] must rebalance global demand to make it sustainable. There is now broad agreement that we cannot return to a pattern of global growth that is built on the U.S. being the world's importer of first and last resort. Looking ahead, the United States must raise national savings, and emerging and more rapidly growing parts of the world, like Asia, must increasingly rely on domestic demand.”

In April, Secretary Lew visited Brussels, Belgium; Frankfurt, Germany; Berlin, Germany; and Paris, France for discussions with his counterparts on economic developments in Europe, promoting policies to boost global growth and promote financial stability. The Secretary met with European Commission President Jose Manuel Barroso (photo below), European Council President Herman Van Rompuy, and European Central Bank President Mario Draghi, and different countries’ finance ministers, with a focus on advancing the agenda for international regulatory reform, and creating additional opportunities for increased trade and investment and job creation. Secretary Lew also discussed Europe's plans to move toward a banking union, which is critical to ensuring the long-term stability of the euro area.

Back in Washington later in April, Secretary Lew attended the spring meetings of the International Monetary Fund (IMF) and the World Bank.  As well as reviewing the global economic outlook, the meetings discussed challenges facing developing and emerging economies, and other development challenges, such as inclusivegrowth. Secretary Lew delivered remarks at a meeting of the Equal Futures Partnership at the World Bank (photo below), which promotes efforts to expand women’s political and economic participation. The Secretary spoke about the direct role women have in strengthening any country’s economy.

During the spring meetings at IMF and the World Bank, Secretary Lew also met with the multi-lateral development banks (MDBs) that Treasury helps support, including the Inter-American Development Bank (photo below). At a time when the United States is striving to shape the global economy, the MDBs are important partners in supporting our national security objectives, promoting economic growth, and addressing global challenges.

In May, Secretary Lew traveled to the United Kingdom for the G-7 Meeting of Finance Ministers and Central Bank Governors to discuss measures to promote global economic stability and growth. While there, the Secretary sat down for an interview with CNBC and discussed our view of the European recovery and the global economy: “We feel strongly there needs to be the right balance between austerity and growth. We've seen in the United States that scheduling the deficit reduction to come a little bit later has left us with a stronger economy.”

​​In July, Treasury hosted the Economic Track meetings for the fifth round of the U.S.-China Strategic and Economic Dialogue. Secretary Lew led the economic talks during the two days, serving as the President’s special representative.  The U.S.-China Strategic and Economic Dialogue was established by President Obama and Chinese President Hu in April 2009 and represents the highest-level bilateral forum to discuss a broad range of issues between the two nations. The Dialogue is an essential step in advancing a positive, constructive, and comprehensive relationship between the two countries, and it concluded this summer with the United States and China announcing their intentions to negotiate a U.S.-China Bilateral Investment Treaty (BIT). This marks an important step in opening China’s economy to U.S. investment by eliminating market barriers, and leveling the playing field for American workers and businesses, and represented the first time that China has agreed to negotiate a BIT that was based on a negative list and that includes market access for all stages of investment.


Later that July, Secretary Lew traveled to Moscow, Russia to attend the G-20 Meeting of Finance Ministers and Central Bank Governors and wrote an op-ed in the Financial Times saying that the G-20 must pursue policies that boost domestic demand and employment: “In many parts of the world, such as Europe, growth is too weak to drive job creation, and it is critical to take steps to bolster private hiring. Elsewhere, as in China, it is critical to speed reforms to shift towards demand-led growth.


On his return from the G-20, Secretary Lew visited Athens, Greece, to meet with senior government officials to discuss Greece’s economic reforms and Europe's policies to support a strong and durable recovery. In remarks at the Acropolis Museum (photo below), Secretary Lew said “engagement with Europe remains at the top of my agenda, because U.S. jobs and growth are inextricably linked to Europe achieving growth and prosperity.”


In October, Secretary Lew attended the Fall Annual meetings at the IMF and World Bank and met with international counterparts. On the sidelines of the meetings, Secretary Lew hosted African finance ministers for a roundtable discussion (photo below) on creating frameworks to encourage investment in Africa’s energy sector. Secretary Lew stressed that greater access to energy will create economic opportunities in Africa that have the potential to transform Africa’s economy and boost global growth. Secretary Lew highlighted President Obama’s Power Africa Initiative and committed to work with other nations and the multilateral development institutions to increase the number of households and businesses in Africa with access to power by 20 million and to bring on line 10,000 megawatts of new power production capacity in Africa over the next five years.


In October, Secretary Lew and Indian Finance Minister P. Chidambaram also met in Washington for the fourth annual meeting of the U.S.-India Economic and Financial Partnership, where they agreed to deepen our cooperation bilaterally and in multilateral fora, including the G-20, to achieve reforms for stronger, more sustainable and more balanced growth.

And last month, Secretary Lew traveled to Japan, Singapore, Malaysia, Vietnam and China to hold discussions with his counterparts about the U.S. and regional economic outlook. Secretary Lew also discussed policies to boost regional growth and global demand, in particular the Trans-Pacific Partnership (TPP) Agreement, and in China, he received an update on progress on China’s reform agenda and discussed efforts to level the playing field for U.S. workers and business. The Secretary previewed his week-long trip in an op-ed published in The Wall Street Journal Asia and wrote 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.


As Secretary Lew testified at a Congressional hearing last week, “progress at home in part depends on the state of a global economy that continues to face many challenges.” 

The long recession in the euro area seems to be ending, although unemployment remains very high in many countries. Having made significant progress on achieving financial stability, Europe is now in a position to place greater priority on boosting demand and employment. In Japan, the central bank and parliament have taken forceful action to begin ending deflation, but to achieve sustained success Japan​ needs to undertake structural reforms to strengthen domestic demand growth. Recently, some emerging markets have slowed as post-crisis stimulus wanes. There has long been recognition that macroeconomic policy in the United States and other advanced economies will eventually return to normal as growth strengthens. Emerging markets need to make reforms that increase their resilience and address structural constraints to growth. China’s new leadership recently announced bold commitments to reform. The pace and character of these reforms will shape China’s economic transition toward domestic consumption led growth, and away from resource-intensive export growth.

Part of my job is to work to create the most favorable external environment for U.S. jobs and businesses. The international financial institutions – the IMF and MDBs – are indispensable partners in this effort and it is imperative that we preserve our leadership in these institutions. Our investments in these institutions foster a more stable and vibrant global economy, which is critical to a growing U.S. economy. 


Holly Shulman is the Spokesperson for International Affairs at the U.S. Department of the Treasury.

Posted in:  International Affairs
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