For months, US lawmakers have warned US Treasury Secretary Henry Paulson that patience was wearing thin as his economic dialogue with Beijing failed to produce breakthroughs on currency and other disputes.
Now, as he meets this week Chinese leaders, Paulson faces new pressure in Congress, where legislators have proposed measures that would punish Beijing for manipulating its currency.
"The problem is, there is very little they can do in the immediate future that will make Congress happy," said Andy Rothman, a China strategist for investment bank CLSA.
Paulson is due to hold talks with Chinese President Hu Jintao (
The secretary also is to meet with Chinese Vice Premier Wu Yi (
But Paulson's real target audience is as much Congress as Beijing.
"Paulson is going to be hoping to come back from the current trip with private whisperings and confidences that he can share with members of Congress so as to discourage drastic action," said Sherman Katz, a former trade lawyer and researcher at the Carnegie Endowment for International Peace in Washington.
Paulson has appealed for patience, saying the dialogue launched last December needs time to produce results on complaints about China's currency controls, product piracy, barriers to foreign entry into its financial industries and other issues.
Beijing has begun easing currency controls and taken steps to rein in its surging trade surplus. But Washington and other governments that have seen trade deficits with China soar want faster action.
Critics say Beijing keeps its currency undervalued by up to 40 percent, giving its exporters an unfair price advantage and adding to China's swollen trade surplus.
Last week, over Paulson's objections, a Senate panel approved a bill to require Treasury to identify and punish currency manipulators. Another measure proposed earlier would tighten the legal definition of currency manipulation to make China more likely to be cited.
Beijing says the yuan will eventually be allowed to trade freely on world markets.
But it says abrupt changes would hurt its underdeveloped banking industry and cause financial turmoil.
China revalued the yuan by 2.1 percent against the US dollar in July 2005 and has allowed it to rise by about 7.2 percent since then. Last week, it was trading at about 7.6 to one dollar. Financial analysts expect Beijing to let the yuan rise by an average of about 5 percent annually over the next few years -- far less than critics want.
Yesterday, Paulson began his latest China visit with a stop at Qinghai Lake to highlight environmental challenges amid the country's breakneck growth.
Paulson's stature as a former Goldman Sachs chief executive and personal lobbying of Congress have bought him time, analysts say. But China's supercharged economic performance is fueling arguments that it can afford to move faster.
The economy expanded by 11.9 percent last quarter -- the fastest quarterly growth in 12 years -- and the trade surplus jumped by 85 percent last month to US$26.9 billion.
Beijing's standing with critics of its trade record has been hurt by its disastrous string of safety complaints about products ranging from toxic toothpaste to faulty tires, Katz said.
"It contributes to a sense that this may be a government that has a lot to learn about acting as a responsible citizen in the global economy," he said.
The last formal meeting of the economic dialogue in May ended with no progress on currency or other major issues.
Since then, China has announced measures to rein in surging export growth. It repealed rebates of value-added taxes on more than 2,000 types of goods ranging from cement to plastic products last month.
Last week, the government said it would limit the growth of its "processing trade," a big but low-profit segment of the economy that imports components and exports finished goods.
"It will have a small impact but not enough that members of Congress will say they are satisfied," Rothman said.
US companies are split over how to treat China.
Small and midsize manufacturers are demanding an end to what they say are unfair advantages for their Chinese competitors. All are urging caution, warning against any steps that might disrupt growing commercial ties.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
RESTAURANT POISONING? Deputy Minister of Health and Welfare Victor Wang at a press conference last night said this was the first time bongkrekic acid was detected in Taiwan An autopsy discovered bongkrekic acid in a specimen collected from a person who died from food poisoning after dining at the Malaysian restaurant chain Polam Kopitiam, the Ministry of Health and Welfare said at a news conference last night. It was the first time bongkrekic acid was detected in Taiwan, Deputy Minister of Health and Welfare Victor Wang (王必勝) said. The testing conducted by forensic specialists at National Taiwan University was facilitated after a hospital voluntarily offered standard samples it had in stock that are required to test for bongkrekic acid, he said. Wang told the news conference that testing would continue despite
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)