US Treasury chief says US, China must 'maintain partnership' to solve unsolvable

US Treasury chief says US, China must 'maintain partnership' to solve unsolvable

	Published : Tue, 22 May 2007 14:31 By : Agencies Print this Story

WASHINGTON (Thomson Financial) - Despite growing tensions between the United States and China, the two nations must 'maintain a partnership' to solve what may seem to be intractable differences over international trade and other economic disputes, US Treasury Secretary Henry Paulson said this morning.

'Our task is not an easy one. We must address the immediate concerns that are impacting our industries and citizens and simultaneously identify tomorrow's issues,' Paulson said in opening remarks of high-level talks between top officials from both nations.

'We must maintain a partnership, and engage in this process to solve what may seem unsolvable,' he said, adding that Americans are 'impatient' with the pace of change in China, which has become 'a symbol of the real and imagined downside of global competition.'

The Treasury chief said the cabinet-level delegations, known as the 'Strategic Economic Dialogue,' are meeting 'under the wary eyes' of politicians, business and labor in both countries and that there is 'a growing skepticism in each country about the others' intentions.'

Treasury officials have emphasized that the Chinese delegation, headed by Vice-Premier Wu Yi, will also meet with members of Congress behind closed doors during their visit.

Officials and many outside analysts are skeptical that the Chinese understand the intensity of anger in Washington and the real potential for a protectionist backlash.

Last Friday, the Peoples Bank of China widened the band in which the yuan is allowed to fluctuate against the dollar, but the move was seen in currency markets as a largely symbolic attempt to improve the atmosphere before the the SED talks.

Treasury's China Special Envoy Alan Holmer has said the US is also expecting China to offer wider access to American financial services firms and airlines during the talks.

For their part, the Chinese want looser US restrictions on high-technology exports to their country.

dennis.moore@thomson.com

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