US Treasury Secretary Henry Paulson said on Friday he will push China to let its currency rise in value and clamp down on piracy of US copyrights when he returns to Beijing in December for talks.
Interviewed on Bloomberg television, Paulson said it would help correct global trade imbalances if China's yuan, also called the renminbi, rose in value. US manufacturers claim China manipulates its currency's value, gaining unfair trade advantage because its goods are cheaply priced in America's consumer markets. Some US producers claim China's yuan is undervalued by as much as 40 percent.
"I believe that an appreciation of the renminbi is just a good thing," Paulson said. "It's a good thing from China's standpoint, it's a good thing from our standpoint, it's a good thing for the rest of the world."
Paulson, who visited China in September, said he will return next month for the first round of talks under the rubric of a "strategic economic dialogue" that is to shape the long-term economic relationship between the two countries.
The former Goldman Sachs chief made clear that not only China, but also other Asian nations including Japan as well as European countries need to make reforms that make their economies more dynamic and less reliant on exports.
But China has further to go, he suggested. "To get the kind of structural change we need in China, it's going to take a little bit longer because they're going to need to really continue on the path of reform, opening up their capital markets and making changes in their economy to rely to a greater extent on consumption," Paulson said.
China evidently is high on Paulson's agenda for the remainder of the Bush administration's tenure, which ends in early 2009. Paulson said he pursues "a two-fold approach" with Beijing that includes not only looking at long-term objectives but also sorting out immediate irritants to build more trust. "I will be focusing very hard on the issues you'd expect me to - currency flexibility, we need more intellectual property.