CHINA / National
Paulson: China visit is for listening
(AP/Chinadaily.com.cn)
Updated: 2006-09-19 07:05
SINGAPORE -- U.S. Treasury Secretary Henry Paulson on Monday said on the
eve of his first official visit to Beijing that he will be patient in
dealing with the fast-growing country.
U.S. Treasury Secretary Henry Paulson speaks during a news conference
after G7 meetings in Singapore September 16, 2006. [Reuters]
"I do care a lot about China progressing with their reforms," said
Paulson, who spoke to reporters in Singapore. "I am not looking for
immediate solutions or quick fixes to any particular economic issue."
That's a message the former head of Goldman Sachs Group Inc., who begins
a four-day trip to China on Tuesday, has maintained while attending a
gathering of Group of Seven finance ministers and the annual meetings of
the International Monetary Fund and World Bank.
"This is a relationship that is very important to both our countries," he
said. "There is a good deal of interdependence." On Saturday, he told a
press conference that he was going to China with the intention of
listening to officials there.
At Goldman Sachs, Paulson visited China on numerous occasions, making key
contacts there. He said he would like to utilize that experience, but
downplayed expectations.
"We should not underestimate the fact that I'm wearing a different hat
now," he said.
Since taking over the top Treasury spot in July, Paulson has been careful
to avoid statements that appear to put strong pressure on China,
especially on the sensitive issue of currency reform.
Paulson on Monday declined to say what he saw as an appropriate rate for
the yuan. He said, however, that "the strong dollar is clearly in our
nation's interest" and that it wasn't just China that needed to change.
"We've got a low savings rate and it is a problem in the U.S.," he said.
"We can do more there and we can do more on deficits."
Paulson spoke before the Commerce Department reported Monday in
Washington that the U.S. current account deficit increased in the spring
to its second highest level ever, reflecting a big jump in payments for
foreign oil.
The deficit in the current account, the broadest measure of trade that
includes goods and services as well as investment flows, rose to $218.4
billion in the April-June quarter, an increase of 2.4 percent over the
first three months of the year.
The shortfall represents the amount the United States must borrow from
foreigners to cover the gap between exports and imports.
So far, foreigners have been content to hold dollars in payment for U.S.
purchases of cars, televisions and foreign oil. Countries like China,
Japan, South Korea and Middle Eastern oil producers have for years been
investing those dollars in U.S. Treasuries, helping fund the deficit.
But the concern is what would happen should they and others decide they
want to hold less in dollar-denominated assets and more in other
currencies, such as the euro or yen, possibly sending U.S. stock prices
and the value of the dollar plunging and pushing U.S. interest rates
sharply higher.
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