Geithner welcomes India’s new drive for reform

WASHINGTON, Tue Oct 9, 2012 – U.S. Treasury Secretary Timothy Geithner welcomed New Delhi’s new-found appetite for economic reform on Tuesday, barely three months after Washington had voiced concern about India’s deteriorating investment climate.

Hailing the latest reforms as “significant,” Geithner told a news conference with Indian Finance Minister P. Chidambaram in New Delhi that the policies offered “a very promising path to improving growth outcomes for the Indian economy.”

India’s economic growth has slowed to its lowest in nearly three years and earlier on Tuesday the International Monetary Fund (IMF) sharply cut its projection for GDP growth to 4.9 percent in 2012, one of the lowest official forecasts so far.

“The recent reforms advanced by Prime Minister (Manmohan) Singh and Minister Chidambaram will help provide a foundation for stronger economic growth, an increase in investment, and more widespread gains in income,” Geithner said.

Regulatory uncertainty and policy gridlock have battered foreign corporate investment towards India over the past year, adding to dramatic slowdown in growth.

Guessing game begins over next Treasury Department chief

WASHINGTON, Wed May 23, 2012 – Wanted for the Treasury Department: a new boss who can fix trillion-dollar-plus budget deficits, overhaul the tax system and spur a reluctant Europe into fixing its debt crisis.

It’s a tall order, especially when the new Treasury chief also must deal with a fractious Congress – and all for a salary lower than that paid to many junior Wall Street bankers.

Economists, investors and veterans of past administrations are appraising potential successors to Treasury Secretary Timothy Geithner, either in a new Obama administration, if President Barack Obama is re-elected, or under Mitt Romney.

Geithner has made it clear that he is leaving the post he has held since January 2009 even if Obama, a Democrat, beats Romney, the presumptive Republican presidential nominee, in the Nov. 6 election.

Lots of names are making the rounds. Among Democrats, they include finance leaders like Larry Fink of asset management firm BlackRock and politically connected Washington insiders like fiscal expert Erskine Bowles.

If the White House goes to the Republicans, Glenn Hubbard, a top Romney adviser, is considered a front-runner, as is Robert Zoellick, the outgoing World Bank chief who boasts Wall Street experience and a contact list that spans the globe.

U.S. cannot overhaul tax code in 2 months: Geithner

WASHINGTON ― Treasury Secretary Timothy Geithner said on Tuesday the country’s tax code was riddled with special preferences but it was not possible to fix the system before the end of the year.

A select group of lawmakers are grappling with how to find at least $1.2 trillion in savings over the next decade. Although there is pressure on the six Democrats and six Republicans to fix the tax code, Geithner said it was not possible to do so by a November deadline.

“We are not going to do fundamental tax reform in two months,” Geithner told the Senate Small Business Committee. Geithner pointed to tax benefits for small businesses that are part of the Obama administration’s $447 billion jobs program.

Those include an extension of the employee payroll tax holiday and allowing companies to deduct the value of their new investments from their tax obligations.

“This is a bridge to fundamental tax reform not a substitute,” he said. Senate Republicans have already blocked the overall bill, forcing the administration and Senate Democrats to consider pushing parts of the bill through Congress.

Geithner urged Congress to support specific provisions in the proposal. He said that small U.S. businesses still face a very tough economy and are experiencing more challenges than larger businesses after the recession.

“The biggest problem facing the economy today… if you look at what businesses say today, their overwhelming challenge is they don’t see enough growth and demand for their products,” he said.

The congressional deficit reduction panel has until Nov. 23 to reach an agreement to curb federal spending. If lawmakers fail to do so, automatic budget cuts will be triggered starting in 2013 that would cut funding across the board.

Treasury Secretary Geithner slams China’s intellectual property policies

WASHINGTON ― Treasury Secretary Timothy Geithner said on Thursday that China is holding to its decades-old strategy to steal American intellectual property, in a pointed statement reflecting U.S. officials’ growing impatience with Beijing.

“They have made possible systematic stealing of intellectual property of American companies and have not been very aggressive to put in place the basic protections for property rights that every serious economy needs over time,” Geithner told a forum in Washington.

“We’re seeing China continue to be very, very aggressive in a strategy they started several decades ago, which goes like this: you want to sell to our country, we want you to come produce here … if you want to come produce here, you need to transfer your technology to us,” Geithner said.

Although unusually direct, Geithner’s comments echo a common refrain from U.S. officials and executives. The new U.S. Ambassador to China, Gary Locke, who has assailed China in the past for its trade practices, has put the defense of U.S. intellectual property among his chief priorities.

China has said it would drop some of its “indigenous innovation” rules that have riled foreign companies who say access to government equipment and technology orders hinge on their transferring patents and other intellectual property.

But business associations in China argue that enforcement of Beijing’s promises has been spotty, particularly at the local government level, hampering foreign companies’ access to a market estimated to be worth as much as $1 trillion a year.

In an offshoot of Washington’s dissatisfaction with Beijing’s trade policies, leaders in Washington have long argued that China’s yuan currency is undervalued, giving Chinese companies a price advantage that costs U.S. jobs.

But the foreign business community in China — concerned about what they see as China becoming more closed toward foreign investors in recent years — has argued that the emphasis on yuan revaluation distracts from the most serious issues threatening U.S. business interests.

A coalition of 51 U.S. business groups sent a letter dated Wednesday to senators considering a currency bill, urging them to focus more on China’s inadequate protection of intellectual property and restrictions on market access.

“… unilateral legislation on this issue [yuan reform] would be counterproductive not only to the goals related to China’s exchange rate that we all share, but also to our nation’s broader objectives of addressing the many and growing challenges that we face in China,” the groups said.

Piracy and counterfeiting of U.S. software and a wide range of other intellectual property in China cost U.S. businesses alone an estimated $48 billion and 2.1 million jobs in 2009, the U.S. International Trade Commission has said.

The United States’ trade deficit with China hit a record $273 billion in 2010 and could top that this year.

In May, China was listed for the seventh year by the U.S. Trade Representative’s office as a country with one of the worst records for preventing copyright theft.