QINGHAI LAKE, Qinghai: US Treasury Secretary Henry Paulson saw for himself yesterday efforts to reverse environmental degradation around China's largest inland saltwater lake, taking the spotlight off currency tensions for a day.

"Climate change is a very important issue in this country, it's very important globally and it's very important in the US," Paulson told reporters during a visit to the Qinghai Lake, which is shrinking because of rising temperatures.

"By coming here I call attention to what China is doing environmentally and reinforce what it's doing."

Paulson, a longtime environmentalist who has chaired The Nature Conservancy, said he was impressed with a program funded by the Chinese central government to reclaim advancing desert areas near the lake by planting vegetation on sand dunes and former farmland.

Qinghai Lake in the Northwest China's Qinghai Province was ranked at the top of the country's five most beautiful lakes in a national survey by the China National Geography magazine two years ago.

The lake is about 3,200 meters above sea level and spread across about 4,300 square km. Thawing glaciers and abundant rainfall have swollen the size of Qinghai Lake from 4,254 square km in July 2004 to its current size of 4,285 square km.

Paulson said Qinghai Lake and glaciers on the Qinghai-Tibet Plateau were important for global climate because shrinking of the lake and melting of the glaciers could permanently shift the jetstream, affecting the weather in other continents, too. Likewise, carbon emissions elsewhere could hasten the lake's demise.

He said engagement in environmental issues was important to US President George W. Bush, who wants to draw China into a coalition of the world's top carbon-emitting countries to formulate a plan for reducing greenhouse gas emissions.

"Paulson's visit to Qinghai helped him gain first-hand information and experience on some of the domestic problems and efforts that China is facing. This will help the discussions during the Strategic Economic Dialogue, making it more relevant and practical," said Zhang Jianyu, program manager of the US-based Environmental Defense.

Paulson is scheduled to meet Vice-Premier Wu Yi and central bank Governor Zhou Xiaochuan today and President Hu Jintao on Wednesday.

He told reporters traveling with him that he would again press for faster revaluation of the yuan and other reforms, such as rebalancing China's economy away from exports and toward more domestic consumption and increasing foreign access to China's financial services sector.

Paulson's visit coincides with US lawmakers' efforts to advance legislation aimed at pressuring China to open its markets to raise the yuan's value.

Last week, the US Senate Finance Committee passed a bill that would allow companies to seek anti-dumping duties against products from countries that have "fundamentally misaligned" currencies, leading eventually to intervention by the Federal Reserve.

Paulson said he was concerned over the currency legislation. He preferred achieving currency and economic reform through bilateral and multilateral dialogue.

But he understood the motivation behind it and frustrations among Americans about trade imbalances.

"I don't want China to become an increasingly big political issue in the US," he said.

Agencies-China Daily

(China Daily 07/31/2007 page2)