Cabinet-level officials from Washington and Beijing Wednesday concluded
two days of talks in Annapolis, Maryland with a commitment to cooperate
on energy and environmental issues and begin work on a bi-lateral
investment treaty. VOA's Barry Wood reports there was also discussion
about financial markets and currency values.
Henry Paulson hailed the achievements of the talks, the fourth round in
a strategic economic dialogue launched two years ago. He said the
10-year energy and environmental agreement is particularly significant
as the US and China are the world's biggest oil consumers and biggest
emitters of green house gases. The investment treaty-which will take
some time to negotiate-would enhance each nation's access to the
other's market. The two countries already have a huge and growing trade
relationship. The Chinese delegation was headed by Vice Premier Wang
Treasury Secretary Paulson praised the Chinese for
allowing their currency to appreciate 20 percent against the dollar
over the past three years. That appreciation, he said, should continue
as it will bring benefits to Chinese policy makers.
going to be able to manage their economy much more effectively if they
have a market-driven currency," said Henry Paulson. "It's going to be
better in fighting inflation, you know, monetary policy will be more
Paulson said the Chinese remain committed to having
a market-based exchange rate and that bi-lateral differences concern
only the pace of appreciation.
For their part, the Chinese
called attention to the weakness of the dollar and called for action to
bolster the dollar against other leading currencies. Paulson said the
ongoing credit crisis that erupted last August with bad loans in the US
housing sector tarnished the US reputation as a leader in financial
services. The Chinese, said Paulson, had regarded the US as a teacher
in global financial matters.
"Now they see that the teachers
aren't perfect," he said. "So, we had a lot of discussion. They want to
learn from our mistakes."
US and European financial institutions
made risky housing-related loans that have gone bad, causing hundreds
of billions of dollars of losses.
Private sector economists are
supportive of the U.S.- China economic dialogue, which they believe
will deepen the bi-lateral relationship and possibly prevent
misunderstandings and conflict. The dialogue was launched, in large
part, to deter the US Congress from enacting restrictive trade measures
against the Chinese, who are perceived as having an unfair advantage in
competing against higher-cost US companies.