December 15, 2006
hp-201
Statement by Treasury Secretary Henry M. Paulson
at U.S. Delegation Press Conference
following the U.S.-China Strategic Economic Dialogue
Beijing, China– Good afternoon. Over the last two days my colleagues and I have met with our Chinese partners to discuss a range of issues that are at the heart of our long-term economic relationship. Our discussions have been frank and productive.
We have agreement with the Chinese government on a number of fundamental principles. We agree on the need for balanced, sustainable growth in China, without large trade imbalances, which will aid China's successful integration into the global economy. Important pieces of that equation include exchange rate flexibility, intellectual property rights protections, increasing the role of consumption in the economy and opening up the service sector. We will establish a working group to discuss opening the services sector to competition and investment.
China's currency policy is a core issue in our economic relationship. We have indicated to the Chinese in the clearest possible terms that more flexibility in their exchange rate will help China achieve more balanced economic growth, enhance the effectiveness of monetary policy, safeguard the health of the financial sector and promote over time an orderly reduction of external imbalances.
The Chinese share our view that long-term growth, balance and stability in their economy will depend on open, competitive markets, including capital markets. Open capital markets will create an infrastructure for the Chinese to float their currency over the medium-term. Both sides have agreed that the NYSE and the NASDAQ should open offices in China, a symbolic milestone toward China's further integration into global capital markets. We also have agreed to launch an investment dialogue with exploratory discussions to encourage investment and protect investor rights in each of our countries.
China's full participation in the global economy requires transparency and a commitment to enforcing international laws, especially in relation to property rights. Both sides have committed to reinvigorating discussions within the Joint Committee on Commerce and Trade to improve transparency and intellectual property protections.
Trade is of course an essential element of China's economy and of its connection with the global economy. We have agreed that both the United States and China will strive for a successful resolution of the Doha Round of world trade talks, and we will intensify bilateral contacts to advance toward that goal.
Energy issues were an important part of our discussions. The United States and China are two of the largest energy users in the world. Our energy policies and actions have a significant impact on energy markets and on the global environment. In addition to continuing our dialogue on sustainable and environmentally responsible growth, we have agreed that China will participate in the FutureGen project, which is an international effort aimed at developing clean, energy supplies. We are also launching a joint economic study on energy and the environment.
We leave here with greater confidence that we are on the right path. The Strategic Economic Dialogue is focused on long-term challenges, but we need tangible successes to measure our progress along the way. With that in mind, we have established a number of important workplans to focus our efforts to tackle a number of significant issues, including opening of services, health care, energy and the environment, transparency, investment and aviation.
Our next meeting of the Dialogue will take place in May in Washington. Today we agreed that at the next meeting we will focus on the efforts of both nations to achieve innovative societies and greater openness to trade and investment and without significant trade imbalances.
I am grateful to my colleagues Secretary Leavitt, Secretary Gutierrez, Secretary Bodman, Secretary Chao, and Ambassador Schwab for making this first meeting of the Strategic Economic Dialogue a success. I've been in Washington now only a short time. And I am thoroughly enjoying working with these talented colleagues and the rest of President Bush's economic team to advance America's interests.