US Treasury Secretary Timothy Geithner’s first official visit to Beijing comes at a critical time for both the US credit markets and the US dollar. After a nine-month period that saw an unambiguous reaffirmation of US government debt and the dollar as the haven assets of choice, the recent relaxation in market tensions has seen a marked deterioration in the performance of both.

Indeed, May saw the largest monthly decline in the dollar index in nearly a quarter of a century while the yield on the US 10-year Treasury note has risen to the highest level seen in nine months. It is against this backdrop that Mr Geithner faces the task of persuading his hosts to continue investing a healthy proportion of their ever-expanding foreign exchange reserves in the US.