WASHINGTON: The Bush administration will oppose efforts in Congress to
penalize China for a trade surplus with the United States, Treasury Secretary
Henry Paulson stressed on Wednesday.
US Treasury Secretary Henry Paulson makes his
first speech on the international economy since joining the Bush Cabinet
in July at the Treasury Department in Washington, Wednesday, Sept. 13,
2006.[AP Photo] |
"Protectionist policies do not work and the collateral damage from these
policies is high," said Paulson while delivering his first speech on the
international economy since he took up the post in July.
"By closing off competition and blocking the forces of change, protectionism
reduces the losses of the present by sacrificing the opportunities of the
future," he said. "We will not heed the siren songs of protectionism and
isolationism."
Paulson said that the prosperity of the United States and China is tied
together in the global economy, and "how we work together on a host of bilateral
and multilateral issues will have a significant impact on the health of the
global economy."
He said that the United States must take a strategic view of its relationship
with China.
"Both in China and in the United States, we must not allow ourselves to be
captured by harmful political rhetoric or those who engage in political
demagoguery," Paulson stated.
"Instead, we must realize that the US-Chinese relationship is truly
generational and demands a long-term strategic economic engagement on our common
issues of interest," he concluded.
The United States is China's largest export market and the second-largest
trade partner. Sino-US trade volume reached US$211.6 billion in 2005 with China
registering a surplus of US$114.2 billion.
In his speech, Paulson also said that the United States has nothing to fear
from China's emergence as a global economic power.
"The tasks faced by Beijing are so daunting that the biggest risk we face is
not that China will overtake the US, but that China won't move ahead with the
reforms necessary to sustain its growth and to address the very serious problems
facing the nation," he said.
The secretary will visit China next week after attending the September 19-20
annual meetings of the International Monetary Fund and the World Bank in
Singapore.
During his stay in China, Paulson said that he will urge the Chinese
Government to move more quickly to adopt economic reforms, including a more
flexible currency.
Paulson, 60, was nominated in May to replace John Snow, who resigned on June
29. The former Goldman Sachs CEO, who was sworn in on July 10, has made more
than 70 trips to China as head of the investment giant.
