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A Tough Trek Toward Common Ground in China
Treasury Secretary Henry Paulson finds common cause with China on environmental issues. Climate change is destroying Qinghai Lake.
(By Ariana Eunjung Cha -- The Washington Post)
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The product safety concerns have only served to further anger some members of Congress, who were already threatening punitive trade action against China if it did not revalue its currency. They argue that China keeps its currency, the yuan, artificially low, hurting U.S. businesses. The Senate Banking Committee yesterday approved a measure aimed at forcing the Treasury to crack down on China over this issue.
China has repeatedly said that it agrees that the yuan -- which has risen about 9 percent in the past two years -- should increase in value but that the country will move at its own pace.
Paulson said that during meetings this week with financial leaders, including the head of the People's Bank of China and banking and securities regulators, he continued to push China to revalue the currency. While he said he had no breakthrough deal to announce to Congress, Paulson made the case to the Chinese that the upward movement has not hurt the Chinese economy.
The Chinese "are too polite to say they are frustrated, but I do believe they are asking themselves: Will they ever be able to satisfy us?" he said.
The increasing tensions come as China's trade surplus with the United States has jumped to the highest ever -- up 85 percent from a year ago, providing more ammunition for anti-China legislation. China said that in the first six months of 2007, it exported $112.5 billion more than it imported.
Since March, food safety concerns have dominated phone conversations and meetings between the two countries, making it difficult to discuss anything else, U.S. government officials said.
"There's been a lot of dialogue," Paulson said. "People have been able to deal with this, not emotionally but professionally." The Chinese have announced a broad series of steps to try to improve product safety.
Paulson, who traveled repeatedly to China when he headed the Goldman Sachs investment bank, has clashed with Congress over how to deal with China, advocating dialogue rather than legislation. President Hu Jintao welcomed him to Beijing yesterday as an "old friend."
During Paulson's meeting with Chinese Vice Premier Wu Yi, she said she hoped his visit to the countryside would help inform Paulson's testimony to Congress. "China still has 23 million people living in poverty," she said. "Who could we threaten? We don't have the ability. China does not and will never threaten anyone."
