U.S. Relations With the People's Republic of China (2007)

The Department of the Treasury

December 13, 2007
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Statement by Secretary Henry M. Paulson, Jr. at U.S. Delegation Press Conference at Closing of Strategic Economic Dialogue

Thank you to my Cabinet colleagues for your substantive engagement in this SED meeting. Active participation from everyone here - as well as additional colleagues back in Washington - enabled us to make substantial progress in our economic relationship with China.

As I said earlier, to me the handling of the food and product safety issues emerging in recent months is proof of the effectiveness of the SED. Rather than recriminations and fingerpointing when this issue arose, both our nations were quick to sit down together and work the substance of the issues. We are able to do that because in this first year of our Dialogue we have deepened relationships and understanding across our governments.

Mike Leavitt's work on this issue is a model for addressing all the issues within our economic dialogue.

Let me note a few other highlights of our meeting, before we turn to questions. First, we agreed to put a working group together to develop a 10-year plan for review at our next meeting on cooperation on energy and the environment. The issues of energy security and environmental sustainability are vitally important to both our countries. I find it an exciting prospect that we will set out a long-term and strategic plan for working together toward progress in these areas.

I also am very pleased that we are beginning a strategic effort to work together to combat illegal logging. This is a long-term challenge, and I am encouraged by this significant first step.

We had very healthy discussions about China's progress rebalancing its economy, expanding domestic consumption and moving away from export led growth. The Chinese recognize growing inflationary pressures in their economy and that a more flexible currency expands their ability to use monetary policy to stabilize their economy. I would also note we have made modest progress in the financial services area, expanding opportunities for global financial services companies to do business in China. Opening China's financial markets to foreign competition strengthens the financial backbone of the Chinese economy, and is critical to China's goals of spreading the benefits of growth to all the Chinese people.

While we hold these formal meetings twice a year, the work of the SED proceeds all year long. We will host the next formal meeting in Washington next spring. In the meantime, I am confident we will be working closely together to implement our strategic plans and announce results as they occur.