正文
Treasury chief hopes to set tone in talks with Chinese officials this week in effort to bring about currency reforms.
September 18 2006: 8:36 AM EDT
SINGAPORE (Reuters) -- U.S. Treasury Secretary Henry Paulson on Monday played down hopes for "quick fixes" in the drive to persuade China to let its currency rise, damping market speculation about swifter Asian currency appreciation.
At a briefing where he repeated his support for a strong U.S. dollar, Paulson said he hopes to set a tone in talks with Chinese officials this week that will bring reforms on currency and other issues but skirted any timetable for action.
Treasury chief Henry Paulson
"It takes a while and I'm not looking for immediate solutions or any quick fixes to particular situations," said Paulson who will be making his first visit as U.S. Treasury chief to China this week.
He spoke to reporters traveling with him following meetings at the annual International Monetary Fund and World Bank meetings.
Paulson also participated in meetings on Saturday of finance chiefs from the Group of Seven - the United States, Britain, Canada, France, Germany, Italy and Japan - that called for currency flexibility and essentially aimed to drive up Asian currencies such as Japan's yen and China's yuan.
Paulson said all participants in the global economy need to take steps to keep expansion on track and declared his backing for a strong U.S. currency.
"A strong dollar is clearly in our nation's interest," Paulson said. "I believe that when foreign governments or foreign investors...choose to buy U.S. securities they've got confidence and they know they're getting the best risk-adjusted rate of return."
Paulson's remarks about China gave the U.S. dollar a fresh boost as the market interpreted this as a sign that the United States would not step up pressure on Beijing to allow its currency to strengthen faster. The dollar edged up to a fresh five-month high of ¥118.23.
Paulson, the former chairman of Goldman Sachs (Charts), heads for China on Tuesday to try to persuade Chinese authorities to move forward on introducing greater currency flexibility.
G7 countries on Saturday singled out China for not doing more to help iron out global trade imbalances. But China on Sunday brushed aside calls to take the yuan off its tight leash and said it would stick to its policy of letting the currency climb only gradually.
Paulson said that, as on any issue, it will be important to show that currency flexibility is in China's own interest and that requires time, patience and top-level contacts.
"In the case of China it takes a process where you're talking to all of the right people," he added.
Paulson is scheduled to arrive in Beijing on Wednesday morning and will be there until Friday. He first flies from Singapore to Hangzhou, which is known for its flourishing free enterprise, for one day before the talks in Beijing.
"I'm looking to set a tone and an expectation of working through issues and making progress," Paulson said, adding, "The fact that I keep steering you away from short term doesn't mean I don't like results."
U.S. lawmakers are pressing for quick action by China to let its yuan appreciate, claiming that U.S. markets are being flooded by unfairly cheap Chinese-made goods and that American jobs are being lost as a result -- a powerful theme on the campaign trail ahead of November congressional elections.
Paulson is aiming to place the currency issue among a broader array of concerns, including efforts to promote freer global trade through restarting Doha trade talks and discussing how to bring down global imbalances.
"I'm only going to be in this job for 2-1/2 years and I'll be judged by results and hopefully by setting a tone and building upon what is already a good relationship that has been strengthened significantly by this administration," he said.
Paulson took over Treasury in July following the resignation of former Treasury Secretary John Snow, becoming the Bush administration's third Treasury chief.
China freed its currency from a peg to the U.S. dollar in July 2005 and revalued it by 2.1 percent, but since that time it has appreciated only about 2 percent, prompting outrage from the U.S. Congress.
Agreement at G7
Paulson said all the G7 participants in Singapore on Saturday agreed currency flexibility was important and that imbalances needed to be reduced.
"I said to my colleagues, sitting around the table at the G7, that I wasn't minimizing any of the other risks that we were talking about, I wasn't minimizing the imbalances, but I felt the biggest risk for all of us was protectionist sentiment in one form or another," Paulson said.
In response to questions, Paulson said huge U.S. current account imbalances that other countries say pose a risk to global expansion should not be considered in isolation.
"The U.S. has been growing for a good number of years now, much faster than the major developed trading partners (in) Europe and Japan so that's one fact (and) we've got a low savings rate and it is a problem in the United States," Paulson said.
He said the United States can take steps to boost savings but that European countries, China and Japan should also step up their responsibility to boost demand and take over some of the U.S. role as the world's key consumer.
September 18 2006: 8:36 AM EDT
SINGAPORE (Reuters) -- U.S. Treasury Secretary Henry Paulson on Monday played down hopes for "quick fixes" in the drive to persuade China to let its currency rise, damping market speculation about swifter Asian currency appreciation.
At a briefing where he repeated his support for a strong U.S. dollar, Paulson said he hopes to set a tone in talks with Chinese officials this week that will bring reforms on currency and other issues but skirted any timetable for action.
Treasury chief Henry Paulson
"It takes a while and I'm not looking for immediate solutions or any quick fixes to particular situations," said Paulson who will be making his first visit as U.S. Treasury chief to China this week.
He spoke to reporters traveling with him following meetings at the annual International Monetary Fund and World Bank meetings.
Paulson also participated in meetings on Saturday of finance chiefs from the Group of Seven - the United States, Britain, Canada, France, Germany, Italy and Japan - that called for currency flexibility and essentially aimed to drive up Asian currencies such as Japan's yen and China's yuan.
Paulson said all participants in the global economy need to take steps to keep expansion on track and declared his backing for a strong U.S. currency.
"A strong dollar is clearly in our nation's interest," Paulson said. "I believe that when foreign governments or foreign investors...choose to buy U.S. securities they've got confidence and they know they're getting the best risk-adjusted rate of return."
Paulson's remarks about China gave the U.S. dollar a fresh boost as the market interpreted this as a sign that the United States would not step up pressure on Beijing to allow its currency to strengthen faster. The dollar edged up to a fresh five-month high of ¥118.23.
Paulson, the former chairman of Goldman Sachs (Charts), heads for China on Tuesday to try to persuade Chinese authorities to move forward on introducing greater currency flexibility.
G7 countries on Saturday singled out China for not doing more to help iron out global trade imbalances. But China on Sunday brushed aside calls to take the yuan off its tight leash and said it would stick to its policy of letting the currency climb only gradually.
Paulson said that, as on any issue, it will be important to show that currency flexibility is in China's own interest and that requires time, patience and top-level contacts.
"In the case of China it takes a process where you're talking to all of the right people," he added.
Paulson is scheduled to arrive in Beijing on Wednesday morning and will be there until Friday. He first flies from Singapore to Hangzhou, which is known for its flourishing free enterprise, for one day before the talks in Beijing.
"I'm looking to set a tone and an expectation of working through issues and making progress," Paulson said, adding, "The fact that I keep steering you away from short term doesn't mean I don't like results."
U.S. lawmakers are pressing for quick action by China to let its yuan appreciate, claiming that U.S. markets are being flooded by unfairly cheap Chinese-made goods and that American jobs are being lost as a result -- a powerful theme on the campaign trail ahead of November congressional elections.
Paulson is aiming to place the currency issue among a broader array of concerns, including efforts to promote freer global trade through restarting Doha trade talks and discussing how to bring down global imbalances.
"I'm only going to be in this job for 2-1/2 years and I'll be judged by results and hopefully by setting a tone and building upon what is already a good relationship that has been strengthened significantly by this administration," he said.
Paulson took over Treasury in July following the resignation of former Treasury Secretary John Snow, becoming the Bush administration's third Treasury chief.
China freed its currency from a peg to the U.S. dollar in July 2005 and revalued it by 2.1 percent, but since that time it has appreciated only about 2 percent, prompting outrage from the U.S. Congress.
Agreement at G7
Paulson said all the G7 participants in Singapore on Saturday agreed currency flexibility was important and that imbalances needed to be reduced.
"I said to my colleagues, sitting around the table at the G7, that I wasn't minimizing any of the other risks that we were talking about, I wasn't minimizing the imbalances, but I felt the biggest risk for all of us was protectionist sentiment in one form or another," Paulson said.
In response to questions, Paulson said huge U.S. current account imbalances that other countries say pose a risk to global expansion should not be considered in isolation.
"The U.S. has been growing for a good number of years now, much faster than the major developed trading partners (in) Europe and Japan so that's one fact (and) we've got a low savings rate and it is a problem in the United States," Paulson said.
He said the United States can take steps to boost savings but that European countries, China and Japan should also step up their responsibility to boost demand and take over some of the U.S. role as the world's key consumer.
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