US seeks 'tangible results' in key talks with China
Cary Huang in Beijing
Development of ties is hampered by Americans' misunderstandings: Wu Yi
US Treasury Secretary Henry Paulson yesterday demanded 'tangible results' from the mainland in high-level economic talks but Vice-Premier Wu Yi reminded the visitors that bilateral relations could be harmed by 'misunderstandings' harboured by some Americans who knew little about China.
The talks, agreed to by President Hu Jintao and his US counterpart George W. Bush early this year, are being closely watched because Washington is coming under increasing domestic pressure to get results on issues such as currency appreciation, the bilateral trade imbalance and intellectual property rights violations on the mainland.
The central government let the yuan rise yesterday to its highest level since last year's revaluation, a move analysts saw as a goodwill gesture to Mr Paulson, dubbed an 'old friend' of China after dozens of visits to the mainland in his previous job as chairman of Goldman Sachs.
As the two sides opened talks at the Great Hall of the People, Ms Wu expressed concern that there were some Americans with limited knowledge about China.
'We have had the genuine feeling that some American friends are not only having limited knowledge of, but harbouring much misunderstanding about, the reality in China,' Ms Wu said in opening remarks that were later released by the central government.
'This is not conducive to the sound development of our bilateral relations.'
While she promised further reforms and opening up as part of the efforts to address US concerns, Mr Paulson stressed that the US wanted substance from the talks.
'There is scepticism that this dialogue will accomplish anything of substance,' he said, according to a transcript of the speech published on the US embassy's website. 'Therefore, it is incumbent upon us not only to have frank and energetic discussions, but also to produce tangible results on the most important issues facing our two nations.'
Ms Wu promised that Beijing would continue to reform the pricing system in the mainland economy to make the yuan's exchange rate and the country's interest rates 'genuinely priced based on market supply and demand'.
She said China attached great importance to the issue of trade imbalances and the country was increasing imports to offset trade surpluses with its trading partners.
Speaking to a small group of reporters last night, Mr Paulson said the mainland must step up the pace of economic reforms because the rest of the world was growing impatient for it to do so.
'They're so big and such an economic powerhouse that the rest of the world is going to be impatient, particularly the US, and so they need to accelerate the reform.'
Mr Paulson said he agreed with Ms Wu's comment that the US needed to better understand China's drive to reform its economy. 'But having said that, there're certain things that there's plenty of understanding on, and they have just got to move quicker,' he said. 'There's no lack of understanding about currency flexibility or intellectual property and those kinds of issues.'
Mr Paulson said it was not reasonable to expect that, after just two days of talks, there would be concrete agreements announced today.
'It wouldn't be much of a dialogue if you could come in and, in two days, sit down and announce major breakthroughs,' he said. 'The kinds of issues we are working on are ones that are very fundamental and very long-term.'
Mr Paulson said that when the talks wound up today, the two sides might be able to set out 'work plans' to move forward on resolving some of the economic issues that each saw as important.
The US team will have audiences with President Hu and Premier Wen Jiabao today.