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US Treasury Secretary Gets Warm Welcome From China


Treasury Secretary Henry Paulson has wrapped up a four-day visit to China, saying he had "substantive, unscripted and spontaneous" discussions with Chinese President Hu Jintao and Premier Wen Jiabao. But the visit was more about building a long-term dialogue than finding a quick fix for trade tensions between Washington and Beijing.

The visit by Treasury Secretary Henry Paulson ended with a morning stroll around Beijing's Tiananmen Square and meetings later with President Hu Jintao and Premier Wen Jiabao at the Great Hall of the People.

Paulson received a warm welcome from the leaders. Premier Wen acknowledged Paulson's familiarity with China, a relationship the U.S. official cultivated during his years as an investment banker when he shuttled in and out of the country.

Premier Wen calls the treasury secretary an "old friend" of China, noting that Paulson has paid more than 70 visits and traveled to some of the most remote corners of the country where he has stayed in hotels that cost less than three dollars a night.

Wen's playful words are one indication the Chinese are appreciative of the style in which the U.S. official has approached them, despite the trade imbalance between the two countries and other thorny issues he came to discuss.

Paulson said he was encouraged by the enthusiasm Chinese officials show for economic reforms, such as making China's currency fully convertible. He said the Chinese gave no indication of a timetable for the reforms.

Public pressure is building in the United States for the Bush administration to do something about the burgeoning trade imbalance. China's imports to the United States surpassed American exports to China by 202-billion dollars last year.

Some Americans accuse China of fueling the trade deficit by keeping its currency, the yuan, artificially cheap. Critics say an undervalued yuan has cost American jobs and they demand that China let its currency float.

The Senate is expected to vote soon on a measure to impose a tariff on Chinese imports unless the yuan is revalued.

In the past, Chinese officials have angrily rebuffed such pressure.

During this visit, Paulson - who has said that cultivating long-term relationships is key to doing business in China - was careful not to make forceful demands. He instead spoke to everyone he met, from officials to students, about the added prosperity that further reforms would bring for Chinese families.

The treasury secretary joined Chinese officials this week in announcing a new high-level dialogue that will include twice-a-year discussions on improving economic cooperation.