Posted on 12/08/2006 4:43:04 PM PST by maui_hawaii
WASHINGTON, Dec 8 (Reuters) - U.S. Treasury Secretary Henry Paulson, who leads a high-level delegation to China next week to press Beijing for economic and currency reforms, said he will warn Beijing the rest of the world is growing impatient.
Interviewed on CNBC television, Paulson said China has become too large a player in the global economy to keep pleading for time to make reforms that others see as necessary in the face of growing deficits on trade with China.
"If they were a small country it might be easier for them to say, we're in transition, give us more time," said Paulson, who will lead U.S. talks in Beijing next Thursday and Friday.
"But they're a global economic leader, and the rest of the world isn't going to give them a lot more time," the U.S. Treasury chief said.
U.S. lawmakers and business groups express rising anger at what they consider Chinese manipulation of its yuan currency to gain an unfair advantage in American consumer markets by keeping prices too low for American companies to compete.
Paulson said China needs to recognize the rising protectionist sentiment around the world and respond by speeding up reforms so that global trade flows increase.
"It's a paradox because the lesson of the last 25 has been that those economies that have opened themselves up to competition, reform, integration into the global economy have benefited, and the rest have been left behind," Paulson said.
"But many of the countries that have benefited the most now seem to resist further reform (and) openness to trade, and this is just something we need to fight," he added.
Prior to the CNBC interview, Paulson has largely declined to comment about the Beijing talks in an apparent bid to avoid building up hopes for concrete results.
But a report in the New York Times on Friday quoted an unnamed Chinese official saying there would be a package of "deliverables" to show the so-called "strategic economic dialogue" can produce results.
TAKING THE TROOPS
Paulson will be accompanied by a high-profile group including six other cabinet officers and Federal Reserve Chairman Ben Bernanke. That guarantees close scrutiny of the Beijing sessions which likely will include meetings with Chinese Prime Minister Wen Jiabao and President Hu Jintao.
Paulson refused to say how much he thought China's yuan, also known as the renminbi, needed to strengthen to tamp down U.S. unhappiness about its relative value to the dollar. He said more flexibility in how its value is set should be allowed quickly.
"But obviously on an intermediate-term basis, medium basis, they need a currency with a value set in the competitive market place," Paulson said, adding "They will be unable to do it until they open their capital markets."
Next week's meeting is the first in what is contemplated as twice-a-year sessions between U.S. and Chinese economic officials, with Paulson acting as a virtual U.S. economic czar with authority from the White House.
"A big part of the dialogue is to persuade the Chinese to accelerate the pace of their reform," Paulson said. China agrees on the need to change its economic and currency practices, and "the debate is about timing," he added.
The discussion has sharpened as the U.S. trade deficit with China soared to more than $200 billion last year, making some big U.S. retail chains almost literally into distributors for Chinese-made goods while U.S. manufacturing jobs shrink.
"The case we're making is that there's more risk in going too slow than in going too fast and that they need to speed up the pace of their reforms," Paulson said, for their own benefit and that of the global economy.
"Their economy now is quite big and complex and they're somewhere between a market-driven economy and one that relies on administrative needs to manage it and that will get them nowhere," said Paulson.
He refused to specify what would make the Beijing talks a success. "There are always great expectations and a short-term mentality in this country," Paulson said, but the point was "to put in place measures that are going to help our two countries manage the economic relationship in the long term."
Paulson said he would be satisfied "to come out of the first session with a good understanding on both sides of the issues we need to address and work-plan going forward, a plan to begin addressing those issues."
I think China is soon going to learn that manipulating markets can be a very expensive policy.
LOL--and who will enforce this timeline?
Also political and religious reform.
How so? I wish they would though...
Exactly.
If you own a lot of dollars, and the dollar declines in value, then you take a bath.
You can kiss the political part of that goodbye. It ain't happening.
I posted some articles on that to another freeper a few weeks back.
Making a totalitarian state a "global economic leader" was a foolish move. Indebting ourselves to that state is even more foolish.
I thought Pat Paulson was running for President again. I'm old. But, oh those Smothers Brothers.
Before my day.
Aren't they those yo-yo people or something like that?
Yes, we recently discovered that Tommy Smothers was The YoYo Man. However, during the Dark Ages (the 60's) he was half of a wonderful comedy team. However, he was not the smart one, just the yoyo.
The real hardcore types are nudist out in the jungle of Kauai and smoke pot all day.
I don't want to be a hippie. Too many mosquitos to run around nude like that all day.
I like showers too much to be a hippie.
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