Paulson lauds improving US economic ties with China

Other News Materials 17 June 2008 21:39 (UTC +04:00)

US Treasury Secretary Henry Paulson Tuesday said the United States and China were making positive strides in their complex economic relationship despite past spats over currencies and trade barriers.

"The relationship is growing in a positive direction," Paulson said in opening a two-day meeting of US-Chinese representatives in Annapolis, Maryland. "By definition, the US-China economic relationship is complex, yet the complexity has not interfered with our ability to build a base of trust."

Paulson said both countries were facing serious growth and inflation challenges at the start of 2008, stemming from the ongoing housing and financial crises in the US as well as surging food and energy prices around the world.

China's Vice Premier Wang Qishan said his delegation expected an "in-depth discussion of the US subprime mortgage crisis," which has prompted a drastic economic slowdown in the United States that has in turn impacted countries around the world.

The semi-annual talks are also expected to revolve around energy and environmental issues, as the world's two largest polluters grapple with rising energy demands while trying to cut greenhouse-gas emissions blamed for global warming.

"As the two largest net importers of oil, China and the United States face similar challenges as demand for energy increases," Paulson said.

"We have a strong and shared interest in avoiding supply disruptions, increasing energy efficiency, promoting the efficiency and transparency of the global energy markets ... and expanding the availability and use of alternative energy sources," he said.

The two countries are expected to agree a 10-year deal on energy cooperation by the end of the Annapolis summit. China on Monday also signed 71 business deals worth 13.6 billion dollars with US companies, state agency Xinhua reported.

Paulson said he would push his Chinese counterparts on free trade, open markets and more flexible currency policy in the interests of "balanced economic growth."

Wang said China had made "substantial progress" in improving its trade balance with the United States but warned it would take time to alter the underlying structure of China's still-developing economy.

The currency dispute between China and the US has eased somewhat since the so-called Strategic Economic Dialogue between the two countries was first launched in September 2006. China's yuan has gained 13 per cent on the dollar since December 2006, according to Bloomberg financial news.

Past meetings have been dominated by US complaints that the yuan is undervalued. This week's gathering is being attended by a number of high-level economic officials from both countries, including US Federal Reserve head Ben Bernanke and Chinese central bank Governor Zhou Xiaochuan, dpa reported.