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Yuan appreciation more rapid: Paulson

By Xin Zhiming (chinadaily.com.cn)
Updated: 2008-04-03 16:58

Visiting US Treasury Secretary Henry Paulson said Thursday that US appreciates China's holding of US treasuries and admitted that the yuan appreciation has been "more rapid".

"We appreciate the Chinese investment in all of our securities (including treasuries)," he told Ed Zhang, senior consultant of China Daily, during an exclusive interview with the China Daily website.

US Treasury Secretary Henry Paulson (L) speaks to Ed Zhang, senior consultant of China Daily, during an exclusive interview with the China Daily website in Beijing, April 3, 2008. [chinadaily.com.cn]

China is holding about $490 billion in US treasuries, according to US Treasury figures. Some US politicians have warned that it will be a big danger to the US economic security.

But Paulson said it is not a problem. "We trade $500 billion treasuries a day."

Paulson is on a two-day visit in Beijing for preparations for the upcoming Sino-US Strategic Economic Dialogue (SED) set for June in Washington. He met with Premier Wen Jiabao and Minister of Commerce Chen Deming Thursday before leaving Beijing in the evening.

"The yuan is appreciating more rapidly and I think it's a very important and very wise step," he said, adding that it is in the interest of China.

But many Chinese economists have warned that too fast appreciation of yuan is set to damage the Chinese economy by dampening exports and reducing employment.

Paulson said he appreciates the SED mechanism in helping solve long-term and sensitive issues of mutual concern.

He stopped short of predicting when the US economy will step out of recession, but believed US has a "resilient and diverse" economy that will help long-term fundamentals. "I'm an optimist ... We are making process and working our way through it (the recession)."

Pleased to work with Wang

Paulson said he is looking forward to working with China's new Vice-Premier Wang Qishan, who has succeeded former Vice-Premier Wu Yi to take charge of the country's financial affairs.

"We know each other, we trust each other and we will communicate with each other," he said . "I'm very pleased" to work with Wang, he said.

Wang has the expertise to "tackle difficulties", Paulson said. Wang was mayor of Beijing in 2003 when the city was hit by SARS.

Paulson said he appreciates the role China has played in pushing forward the economic dialogue and was impressed by Wu Yi, who has led Chinese delegation in previous SED sessions.

"I very much enjoy working with Wu," he said. "But she is a tough negotiator."