Top US and Chinese economic officials opened two days of talks on Tuesday that US Treasury Secretary Henry Paulson said he hoped would help the world’s two key energy importers find ways to avoid supply disruptions.
“As the two largest net importers of oil, China and the United States face similar challenges as demand for energy increases, and the global production capacity has remained relatively flat for the past 10 years,” Paulson said at the start of so-called “strategic economic dialogue” talks.
As the talks opened at the US Naval Academy in Annapolis, Paulson said Washington and Beijing do not always agree on economic issues, but said it was important for them to continue a two-year-old “strategic economic dialogue” that he initiated. “Sometimes, we may ... disagree quite strongly, but we keep talking,” Paulson said, adding that he felt the time was right for making progress on energy and environmental issues. Paulson said he would discuss with Chinese Vice Premier Wang Qishan how to avoid disruptions in oil supply, make global energy markets more open and transparent, and discuss how to boost alternative energy uses. “Significant opportunity exists for the United States and China to achieve immediate progress and long-term strides towards energy security and environmental sustainability,” Paulson said.
Wang said the talks were especially important when the two countries’ economies were under stress and said Beijing was trying to address US calls for China’s currency to rise in value. However, he called on the United States to understand that it needed to carry out reforms at a measured pace. “But solving some types of problems requires a process and needs to consider China’s national conditions and stage of development,” Wang said. “We hope the US will place great emphasis on China’s concerns.”
Critics in Congress claim the US-China talks have produced relatively few concrete results and periodically threaten legislative action to try to force a swifter revaluation of China’s currency to bring down a huge US trade deficit. Wang suggested that course would not work with Beijing. “When conflicts or problems arise, we need to solve them through dialogue and communication and improve mutual understanding ... to avoid complicating and politicizing economic and trade issues,” Wang said.
With the Bush administration’s term winding down, some US business interests say they favor a different approach toward China in future to try to get stronger commitments to change Beijing’s business methods. “I don’t think the expectations are very high and I think the talks will meet those expectations,” Scott Paul, director of the Alliance for American Manufacturing, said of the Annapolis meeting. Paul said China’s currency policies as well as a range of state subsidies it maintains for Chinese industry, including cheap energy, should come under tougher scrutiny than is provided for in the talks.
PAULSON: US-CHINA RELATIONSHIP KEY
Paulson described the US-China relationship as key to one another’s interests and said it was vital for the two countries to keep talking to maintain a secure global economic system. The Treasury secretary said he wanted to discuss the importance of keeping markets open and resisting protectionist sentiment, and nodded toward the US desire for Beijing to allow more access to its growing financial markets. “We will discuss how open and competitive financial markets, including currency markets, are more resilient in times of turmoil and more vibrant and efficient in supporting balanced economic growth,” he said. Paulson made no direct reference in his prepared remarks to US wishes for Beijing to let its yuan currency rise in value more rapidly, a long-standing sore point for US manufacturers who claim the yuan is so undervalued that it gives China an unfair trade advantage.
US officials sought to highlight benefits from closer engagement with China. On Monday, US and Chinese companies signed 35 business deals in Washington in sectors ranging from automobiles to telecommunications. The deals, worth more than $8.3 billion, were timed for announcement just ahead of the economic talks. On Thursday, Commerce Secretary Carlos Gutierrez is to greet the first Chinese tour group to visit the United States under an agreement made at last year’s talks in China. (Reuters)