Print

Mail

wiki links

Paulson wants `tangible results' on yuan, trade

"The more tangible reforms we see, the easier it is for me to deal with Congress."

Henry Paulson, US Treasury secretary

US Treasury Secretary Henry Paulson said China had to accelerate its commitments on trade and a market-set exchange rate to head off protectionist legislation in Congress.

Paulson, who hosts the second session of a new bilateral economic dialogue next month, said on Friday that the talks need to yield "tangible results." He said in a speech in New York that Chinese policymakers "are not moving, in my judgment, quickly enough" on the yuan.

The US Treasury chief is under pressure to produce benefits from the Strategic Economic Dialogue he established last year as lawmakers consider about half a dozen bills to protect US companies. Tensions with China also threaten to rise after the Commerce Department imposed duties on Chinese paper last month.

"The American people are concerned, Congress is concerned and there's a lot of protectionist sentiment" toward China, Paulson said in an interview on the Charlie Rose show on PBS television following his speech in New York. "The more tangible reforms we see, the easier it is for me to deal with Congress."

Paulson, 61, told the Committee of 100, a group that consists of prominent Chinese-Americans, including cellist Yo-Yo Ma (馬友友) and architect I.M. Pei (貝聿銘), it was "natural" for problems to develop as trade increases.

China passed Mexico last year to become the second-largest US trade partner, after Canada. The US trade deficit with China widened 15 percent to a record US$232.5 billion last year.

Paulson, who has traveled to China three times since taking office in July, said the focus on Chinese policies centers on the exchange rate because that's the most "visible" gauge of the speed of change. As China integrates with the global economy, it's "an unnatural act" to keep managing its currency, he said.

China prevents the yuan from gaining more than 0.3 percent a day against a basket of currencies that includes the dollar, euro and yen. The yuan has risen only 7.2 percent since the government ended a link to the US dollar and introduced the current system in July 2005. It closed at 7.72 per US dollar on Friday in Shanghai.

Asked about how his campaign for faster gains in the yuan relates to his stance on the US dollar, Paulson reiterated he seeks a "strong" US currency.

"I believe very strongly that a strong dollar is in our nation's interest, and I'm a big believer in currencies being set in a competitive, open marketplace," he said on the Charlie Rose show.

Legislators have introduced about half a dozen separate bills aimed at China, including a Senate measure spearheaded by Kentucky Republican Jim Bunning that would make currency "misalignment" a punishable subsidy.

"There will be some, I believe, unattractive bills that are voted on in Congress," Paulson said. "I think the Chinese are very well aware of this -- I think they should be aware of it."

Outside of the Treasury, other parts of US President George W. Bush's administration have taken a harder line with China. The Commerce Department last month put duties on imports of Chinese glossy paper, saying the government unfairly subsidizes its producers. Two weeks later, the US Trade Representative's office filed two complaints at the WTO, alleging piracy of copyrighted movies, music, software and books.
This story has been viewed 1240 times.