Paulson Calls for China to Undergo More Reforms in International Trade

US Treasury Secretary Henry Paulson recently called for China to speed up its economic reforms. Although the US official acknowledged the growing importance of the diplomatic and international trade ties between his country and China, he also urged the Asian nation to do more in its economic reforms. It must be noted that China has faced several complaints regarding its practices in international trade. The criticisms and complaints have been raised not only by the United States, but also by other countries.

In a speech delivered to the faculty and students of Harvard Business School, the US treasury secretary stated that the renminbi, which is China's currency, was a symbol of the pace of the economic reform being undertaken by China. Mr. Paulson noted that China was making a slow progress in its economic reforms considering the high trade deficit between the US and China. It must be noted that the rising international trade gap has been one of the major issues pressuring the Bush administration. In fact, many officials have urged Washington to resolve the country's rising trade deficit with China.

During his speech, Mr. Paulson said that China needed to speed up in reforming its currency system in order to arrive at a situation in which the currency is determined by the market. The US treasury secretary said there were many currencies in the world that were not determined by the market. But he stated that none of them was as important and big as the Chinese currency. It must be noted that the low value of the yuan has been considered by some US officials as one of the factors behind the rising international trade deficit of the US.

Mr. Paulson made the speech in preparation for the second round of the Strategic Economic Dialogue, which he and Chinese Vice Premier Wu Yi launched last year. The first round of the talks took place in December 2006 in Beijing. The second round would be held later this month in Washington. The US treasury secretary said that tensions were certain to surface as the international trade ties between the US and China progressed.

It must be noted that earlier last month, the US filed to cases against China at the World Trade Organization. The two cases covered piracy and the restrictions imposed by China on some American goods. The US government has also imposed higher tariffs on Chinese paper products, which received subsidies from the government. The US-China international trade relations play a vital role in the respective economies of the two nations. But their international trade ties have been affected by several issues concerning currency, piracy, and government subsidies on the part of China.