US Treasury's Paulson in China next week as Senate mulls currency bill UPDATE

US Treasury's Paulson in China next week as Senate mulls currency bill UPDATE

	Published : Tue, 24 Jul 2007 20:18 By : Agencies Print this Story

adds details, Capitol Hill pressure

WASHINGTON (Thomson Financial) - US Treasury Secretary Henry Paulson will travel to China next week to meet with President Hu Jintao and other top Chinese officials about lingering economic disputes and the environment, the Treasury Department said today.

Just hours after Treasury's announcement, lawmakers on Capitol Hill raised the stakes of the trip by announcing they would on Thursday take the first steps toward sanctioning China for having an undervalued currency.

The Senate Finance Committee scheduled a vote on legislation that seeks to punish China for its currency policy, which US manufacturers say is undervalued by as much as 40 pct. That makes it cheaper for Chinese products to be sold in the US and more expensive for American products sold in China.

The Senate bill is just one of many efforts on Capitol Hill to pressure China and would have to be approved by both the House of Represenatives and the Senate before going to President George Bush's desk for signature into law.

Still, the Senate plans increase pressure on Paulson to deliver some sort of result on currency during his trip in order to ward off legislation.

Paulson has had previous success in getting Congress to delay legislation that would sanction China over currency.

In 2006, New York Democratic Senator Charles Schumer said he would only drop plans for currency legislation if Paulson were able to convince China to immediately and dramatically revalue the yuan.

China made no such pledge to Paulson, but Schumer nonetheless agreed to delay his bill for the fifth straight time at Paulson's urging.

Two other bills related to currency -- one in the House and one in the Senate -- are also expected to be considered in the next few months.

The talks are part of the ongoing US-China Strategic Economic Dialogue (SED), created last year by Bush and Hu to ease growing tensions between the two nations.

Aside from currency, the US Congress has complained for several years about the lack of intellectual property protection in China, over-reliance on subsidies, and several other issues.

Paulson will leave for China at the end of this week, and begin his visit at Qinghai Lake on July 30, where he will likely raise environmental issues.

'The only way to make progress on climate change is to engage all the large economies, developed and developing, to work toward embracing cleaner technology and reducing emissions,' Paulson said in a written statement.

'What's happening with the environment in the middle of China not only affects the local climate and economy but also the global climate and economy,' he said.

Paulson will then travel to Beijing for meetings with Hu and Vice Premier Wu Yi on July 31 and August 1.

pete.kasperowicz@thomson.com

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