Right now the Obama White House needs Beijing and the Chinese know it. And on Tuesday, China gave the president a gentle reminder.
Sitting beside Treasury Secretary Timothy Geithner, Chinese Vice Premier Wang Qishan made clear that China has concerns about its U.S. investments.
Speaking at the start of the concluding day of the "Strategic and Economic Dialogue" he said, "As a major reserve currency-issuing country in the world, the United States should properly balance and properly handle the impact of the dollar supply on the domestic economy and the world economy as a whole."
China is the United States' biggest creditor, holding $802 billion of U.S. Treasury securities as of May 31, and Washington needs Beijing to keep buying its debt to finance a budget deficit estimated to hit $1.8 trillion this year.
Of course, the conversation between China and the US was about more than economics. In fact, President Obama said it yielded “steady progress on some of the most important issues of our times."
And although he’s under "no illusions that the United States and China will agree on every issue" he said both nations agreed to closer cooperation in areas critical for the world.
To that end Secretary of State Hillary Clinton said China and the US had signed a memorandum of understanding signaling an agreement to cooperate more on climate change, energy and the environment going forward.
Considering the fortunes of China and the United State are becoming even more intertwined, how should you trade?
I’d trade the trend with China Life , counsels Fast Money emerging markets trader Tim Seymour. Or look at NetEase .
