U.S., China Hold Trade Imbalance Talks

Treasury Secretary Paulson may have failed to win guarantees of concrete action from Chinese government.

BEIJING (Kyodo) - U.S. Treasury Secretary Henry Paulson held talks with Chinese President Hu Jintao on Wednesday over the two countries' massive trade imbalance.
Paulson received assurances that further high-level talks would be held in the coming months to discuss the issue, but appears to have failed to win any guarantees of more concrete action from the Chinese government.
The administration of U.S. President George W. Bush believes China is keeping the value of the yuan artificially low, giving its manufacturers an unfair advantage over their American counterparts.
The U.S. trade deficit with China stood at over $232 billion at the end of last year and cheap Chinese imports are continuing to flood into the United States.
After his talks at the Great Hall of the People in Beijing, Paulson briefed members of the American media before flying back to Washington.
''I heard from everyone, right up to the top. They are committed to currency flexibility, to currency reform,'' Paulson was quoted as saying by the Associated Press.
An official at the U.S. Embassy in Beijing said Paulson had stressed that the talks were just part of an ongoing process to resolve the two countries' trade problems.
He also added that the best way to resolve disputes was through continued negotiations rather than punitive legislation, the spokeswoman said.
The U.S. Senate Finance Committee passed a bill last week aimed at punishing countries such as China that are deemed to be keeping their currencies below market value.
Hu and Paulson agreed that further high-level talks would be held in October to discuss trade issues, the U.S. spokeswoman said.
China says it is slowly allowing the yuan to rise in value against the dollar, but it also wants to ensure that any rapid appreciation will not harm China's economy.
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