WASHINGTON (Reuters) - Stronger economic growth overseas is necessary to help unwind global imbalances because the United States cannot do it alone, Treasury Secretary John Snow said on Wednesday.
At a Capitol Hill hearing where he said reports of him soon leaving Treasury were "a lot of fiction," Snow repeated it will take a cooperative effort to shrink imbalances that include big U.S. deficits on trade and capital flows.
He suggested the onus was on the rest of the world since the United States was doing its part by keeping its economy strong and by getting budget deficits down.
"The continued rise in global imbalances -- larger current account balances than were previously thought sustainable -- is a development that particularly needs attending to by economies with weak growth rates, less attractive investment climates or overly rigid exchange rate regimes," he told the House of Representatives Financial Services Committee.
Snow said Japan and Europe must implement reforms to spur faster growth, and China had "a particularly important role to play" by relying less on exports for growth and by adopting a more flexible currency regime so it can manage its economy better.
"We are intensively engaged with China in an effort to bring about greater exchange-rate flexibility, balanced growth and financial sector modernization," Snow said in wide-ranging testimony.