US Treasury Secretary Henry Paulson tried to change the tone of discussions between Washington and Beijing during his first trip to China as treasury secretary, but that did not change the results.
Paulson came away empty-handed in terms of Chinese commitments to deal more quickly with long-festering trade problems such as China's currency system or its widespread piracy of US movies and computer programs.
The one achievement announced during four days of talks with Chinese officials was the establishment of a US-China strategic economic dialogue that will be led by Paulson and Chinese Vice Premier Wu Yi (
The group, which will include other top officials from both governments, will meet twice a year to deal with long-range economic issues.
Critics said that the new panel would join a number of other commissions created over the years that have all failed to contain the widening trade chasm between the two countries, which is on its way to easily surpassing last year's US$202 billion record.
"It's bureaucratic gimmickry. America's domestic manufacturers and working families don't need another talk shop," said Alan Tonelson, a research fellow at the US Business and Industry Council, which represents mainly small manufacturers.
But other business groups praised the new forum, saying it would ensure that US grievances are reviewed at the highest levels of both governments.
The announcement was seen as another step in Paulson's efforts to restore some of the Treasury Department's lost clout. Paulson received assurances from the White House that he would have more of a say in policy deliberations than his two predecessors, Paul O'Neill and John Snow.
One sign of Paulson's influence was the fact that Allan Hubbard, chairman of the US president's National Economic Council and a close friend of US President George W. Bush, accompanied Paulson on his trip to China.
The forum will coordinate administration strategy with a number of other Cabinet agencies, not just on economic concerns but also on energy, health and environmental issues.
"Paulson is staking out a role as the administration's coordinator on a wide range of China issues beyond those normally handled by Treasury," said Nicholas Lardy, a China expert at the Institute for International Economics.
Paulson used the trip to highlight his own close ties with Chinese officials, built up during some 70 trips he made to China while at Goldman Sachs, where he enjoyed a good deal of success winning business for the investment firm.
Believing the administration needed a new approach, Paulson toned down the rhetoric and the expectations for quick success. Those moves were seen as smart, given that tough talk from Snow over the need for China to revalue its currency had met with little success.
"This is a new era in US-China relations and we could not be better positioned in having someone of Hank Paulson's stature dealing with the Chinese," said Myron Brilliant, vice president for East Asia affairs at the US Chamber of Commerce.
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