FROM THE OFFICE OF PUBLIC AFFAIRS

I'd like to make a brief statement and then open it up for questions.

We have just concluded two days of highly valuable meetings with representatives of the Chinese government through the U.S.-China Joint Economic Committee. These meetings have provided rare opportunities to develop a better understanding of each other's economic views -- both as to general economic policy and as to specific issues where we have differences. Two large nations, such as China and the United States, having complex and dynamic economies -- and increasingly linked economically -- will inevitably have disagreements over specific issues. The key is not to let individual disagreements affect the overall relationship, and to work constructively to resolve disagreements whenever possible. The prerequisite for resolving issues is to understand each other's perspectives and our meetings today and yesterday were most useful toward that end. The China/U.S. relationship would benefit greatly from frequent meetings of this kind between officials of our two countries in many areas.

To give you just a few examples of the issues covered: We discussed general macroeconomic performance, including the U.S.' strong recent economic performance, and China's remarkable 15 years of high rates of growth. We also discussed how each of us develops and executes our respective budgets, and how that affects economic performance. We discussed our bilateral trade imbalance, our common interest in cooperating in combating financial crime, the free flow of market data in China, the low savings rate in the United States, China's new approach to curb bank financing for money losing state enterprises, and our respective views on human rights issues in China.

We also agreed on some specific matters, which are listed in the communique, to carry our relationship forward. For example, we agreed to move forward our discussions to conclude a customs mutual assistance agreement. We agreed to intensify various forms of technical cooperation in taxation and in fighting financial crime. I was also very encouraged from my conversation with the Chinese authorities on the status of implementing the program for foreign banks to conduct local currency business in Pudong, Shanghai. The authorities are now considering applications and I was told that progress is expected to be made in the very near future. And we also agreed to consult on an ongoing basis with respect to financial market development and access.

This is by no means an exhaustive list, but does illustrate the constructive dialogue in which we have engaged over the last two days. Now our challenge is to sustain the spirit of understanding and cooperation we have had at this meeting of the JEC, and use the enhanced understanding from this and other similar meetings to move forward on issues such as the trade imbalance, to the extent it is a result of either Chinese or American policies; arriving at commercially meaningful terms on which China can enter the World Trade Organization; and financial market reform and supervision.

To conclude, each of our nations has a great stake in a mutually beneficial economic relationship, but that takes systematic hard work over the long run, both to increase our understanding of each other's perspectives and to deal with individual issues. Now, I would be happy to answer any questions.