Source:

09-21-2006 14:33

U.S. Treasury Secretary Henry Paulson called on China on Thursday to open up its financial sector to international competition.

Paulson, speaking to students at Tsinghua University in Beijing, said international experience showed that freeing up financial markets was "absolutely necessary for long-term economic success".

"One of the most important things any country can do is open up their financial sector to international competition," he said, adding that it would allow more efficient investment and greater returns for China's rising savings.

The United States and China announced a plan on Wednesday for regular high-level talks about their long-term economic relationship which U.S. officials said would not overshadow more immediate concerns such as the yuan exchange rate.

The pact, proposed by U.S. President George W. Bush and agreed to by Chinese President Hu Jintao last month, was announced as Paulson began a three-day official visit to Beijing.

Paulson told a news conference on Wednesday that reform of China's financial sector would happen more quickly with help from foreign investors, and he was confident the country's economy could move up the value chain towards production of higher-value added products.

Paulson also said that friction was unavoidable as economic ties between China and the United States deepened.

But he said that relationship was to the long-term benefit of both countries and warned against protectionist sentiment on both sides.

"Global trade benefits all the countries that participate and those that don't open themselves up to reform and change don't benefit and they get left behind," he said.

Paulson said that concerns about job losses in U.S. manufacturing needed to be balanced against the benefits of cheaper goods.

"There's more weight being given to the production side, to the jobs, and there's less credit to the benefit you guys (China) give, which is the ability to buy products for a lower cost."

Source: Reuters

 

Editor:Ge Ting