US-China divisions could lead to an economic Iron Curtain, Henry Paulson warns
- Ex-US treasury boss predicts a long winter in relations if broader issues are not addressed
- Calls on Beijing to implement bold reforms
Former US treasury secretary Henry Paulson warned a new “economic Iron Curtain” could descend between China and the United States as the divisions between the two nations broaden amid the escalating trade war.
Paulson also warned against attempts to isolate China, but called on leaders in Beijing to implement bold reforms like their predecessors Deng Xiaoping and Zhu Rongji.
Addressing the Bloomberg New Economy Forum in Singapore on Wednesday, Paulson said the American business community had turned from advocate to sceptic and even opponent of past US policies towards Beijing as China had been slow to open up.
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And even on issues where the two nations agreed, such as North Korea, they often pursued divergent approaches, which persuaded people to believe the two did not have shared interests, he said.
“That is because the problems we face, and our divergence of views, even in the economic area, are much broader,” Paulson said.
“Unless these broader and deeper issues are addressed, we are in for a long winter in US-China relations.
“And that is why I now see the prospect of an economic Iron Curtain – one that throws up new walls on each side and unmakes the global economy, as we have known it.”