http://www.usatoday.com/money/economy/trade/2006-12-17-china-usat_x.htm?csp=34


BEIJING ¡ª US and Chinese officials pledged Friday to work on reducing China's huge trade surplus with the USA.

But Treasury Secretary Henry Paulson and a high-level team that included six Cabinet colleagues and Federal Reserve Chairman Ben Bernanke left Beijing with little progress on currency exchange-rate reform and other issues.

The discussions were "very frank and productive," Paulson said, despite the lack of headline breakthroughs on pressing issues.

"We cannot resolve every difference at a single meeting," Paulson said, "but the candid discussions we have had will make progress much more achievable."

Chinese Vice Premier Wu Yi acknowledged the differences between the two sides but said "China's development is not a threat but an opportunity to the USA and the world." Americans "understand little about China's real situation and harbor some misunderstandings," Wu said.

Paulson said the US and China "will each take measures to address global imbalances, notably through greater national savings in the United States and through increased domestic consumption and exchange-rate flexibility in China."

Bernanke, in a speech Friday to the Chinese Academy of Social Sciences, stressed the need for the Chinese to boost domestic consumption. Calling the Sino-US economic relationship one of "extraordinary importance," Bernanke said increasing household consumption would benefit the Chinese people.

Tangible results from the talks included agreement that the New York Stock Exchange and Nasdaq should open offices in China, Paulson said. A second round of talks is scheduled for May in Washington.