Archive for the ‘Henry Paulson’ Category

Treasury chief defends Fed intervention

March 16, 2008

By JEANNINE AVERSA, AP Economics Writer 

WASHINGTON – Treasury Secretary Henry Paulson on Sunday defended the Federal Reserve‘s decision to help rescue Bear Stearns Cos., the teetering Wall Street investment bank. He sidestepped questions about whether other firms are on shaky ground and the possibility of addtional interventions of this kind.

Treasury Secretary Henry Paulson gestures during a news conference ...
Treasury Secretary Henry Paulson gestures during a news conference at the National Press Club in Washington, Thursday March 13, 2008.
(AP Photo/Jose Luis Magana)

At the same time, Paulson sought to send a calming message that the Bush administration is on top of the turbulent situation. “The government is prepared to do what it takes” to ease turmoil in the financial system and minimize any damage to the national economy, Paulson said during a series of broadcast interviews. The Fed’s intervention “was not a difficult decision. It was the right decision.”

The Fed, using a Depression-era procedure, raced to Bear Stearns‘ aid Friday along with JPMorgan Chase & Co. Bear Stearns had made a fortune in mortgage-backed securities but faced a possible collapse after those investments soured. Wall Street nose-dived as fears spread about whether other big firms were in jeopardy.

“When you go through a period like this,” Paulson said, “policymakers need to balance various consequences.”

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Report: China wants strong dollar

November 22, 2007

BEIJING – The head of China‘s central bank says Beijing wants a strong dollar, a government news agency said Thursday.

Zhou Xiaochuan, governor of the People’s Bank of China, made the comment to U.S. Treasury Secretary Henry Paulson at a conference in South Africa, the Xinhua News Agency said.
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“Zhou said he told Paulson China hopes to see a strong dollar,” Xinhua reported. It said Zhou was responding to Paulson’s prediction of a long-term recovery of the weakening dollar, which fell to another record low against the euro Thursday.

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http://news.yahoo.com/s/ap/20071122/ap_on_bi_ge/
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US, China to discuss economy next month

November 21, 2007

By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON – Treasury Secretary Henry Paulson and a group of Bush administration officials plan to travel to Beijing next month for the third round of high-level economic talks with China.

The Treasury Department announced Tuesday that the Strategic Economic Dialogue will take place Dec. 12-13 in Grand Epoch City, a conference center near Beijing.

In addition to Paulson, administration officials expected to participate include Commerce Secretary Carlos Gutierrez, Health and Human Services Secretary Mike Leavitt, U.S. Trade Representative Susan Schwab, Acting Agriculture Secretary Chuck Conner and Stephen Johnson, head of the Environmental Protection Agency.

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U.S. Treasury Secretary Wants Faster China Yuan Rise

October 23, 2007

By Glenn Somerville

WASHINGTON (Reuters) – Treasury Secretary Henry Paulson repeated on Tuesday that China needs to let its currency rise in value more rapidly and warned that U.S.-China relations were under threat from rising protectionism.
Treasury Secretary Henry Paulson is pictured during a G7 finance ... 
Henry Paulson

“Policy-makers in both countries must resist the impulse to discard the hard-fought and long-term gains of open economies by pursuing short-term and misguided policy responses,” Paulson told the George H.W. Bush U.S.-China Relations Conference.

He said prospects for achieving balanced growth in China and the world economy would be much greater if China let its yuan currency rise ….
 talks.

A currency dealer waits for customers at a currency exchange. ...

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http://news.yahoo.com/s/nm/20071023/pl_nm/usa_china_dc_2

China powering world economy

July 26, 2007

By Patrice Hill
The Washington Times
July 26, 2007

China, this year for the first time, has dislodged the United States from its long reign as the main engine of global economic growth, with its more than 11 percent growth eclipsing sputtering U.S. growth of about 2 percent, according to the International Monetary Fund’s 2007 projections released yesterday.

China’s growth, which has been fueled by booming domestic building and commercial development, as well as soaring exports, has accelerated even as U.S. growth dropped to 0.7 percent in the first quarter under the weight of a profound housing recession. China is expected to drive a hearty 5.2 percent expansion of the global economy this year, the IMF said.

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Because credit cards in China have low limits and few stores take them, they are more popular as fashion statements than financial tools.

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To The U.S. Treasury Secretary: China Is Your Worst Nightmare, Sir

To The U.S. Treasury Secretary: China Is Your Worst Nightmare, Sir

July 25, 2007

By John E. Carey
Peace and Freedom
Updated July 26, 2007

On July 25, 2007, the International Monetary Fund released its 2007 projections.  Those numbers indicate that China, this year for the first time, has dislodged the United States from its long reign as the main engine of global economic growth, with its more than 11 percent growth eclipsing sputtering U.S. growth of about 2 percent.

Faced with that information, next week the U.S. Treasury Secretary, Henry Paulson, visits China. He plans to engage in discussions on a host of topics including trade, the balance of trade, global warming and the environment, Intellectual Property Rights (copyrights, licenses and other protections), and, one would expect, the way China deals with the exports it sends our way.

A host of tainted and harmful products from lead-based paint covered toys to poisonous anti-freeze laced toothpaste has to be looming large over next week’s meetings, even if Paulson doesn’t raise the issue.

Henry M. Paulson
Henry Paulson

Mr. Paulson must be feeing significant pressure. If he isn’t, we’ll just reiterate here the things that should give any thinking U.S. Treasury Secretary nightmares instead of a good night’s sleep as he jets his way to Beijing.

Yet Mr. Paulson is usually optimistic on China.

Where many Americans see threats posed by the Asian giant’s growing economic might, Paulson often sees opportunity.

“The fact that they’re the world’s fastest growing economy is something that some people (see) as a problem. I look at that as an opportunity that I’d like to capture,” he said, adding China was the fastest growing market for U.S.-made goods and services.

Congress

The US Congress has complained for several years about China’s undervalued currency, the lack of intellectual property protection in China, over-reliance on subsidies, and several other issues. The Treasury Secretary, in interviews and in documents has said over and over that he is committed to solving “issues of concern to the US Congress.”

One of the most troubling parts of China’s economic policy, from the point of view of the U.S. Congress, is the undervaluation of the yuan. This has been a particular political sore point with no less than three bills dealing with China’s currency policy scheduled for Congressional action this year. Many in Congress want sanctions imposed upon China for its monetary policy. Yet Mr. Paulson has, in the past, been highly effective at convincing the Congress to delay legislation that would sanction China over currency.
Flag of the People's Republic of China

While in China, one might expect Mr. Paulson to lay out the complexity of the difficulty he faces with the Congress, in the hope that China will alleviate his pain.

Global Warming and Environment

The United Nations has condemned China for the worst pollution in the world. China also produces more greenhouse gases than any other nation by far. But China is a world class polluter: many of her rivers are polluted and even much of the ground water is no longer safe. More than 70 percent of the waterways and 90 percent of the underground water is polluted, Chinese experts say.  Almost nowhere in the world is global warming more apparent: and Secretary Paulson will start his discussions with his Chinese hosts at Qinghai Lake.For a millennia this saltwater lake has been the home to some of China’s most beautiful birds. Black-necked cranes, Siberian swans and black cormorants are among 189 species that spend part of each year here hunting and building nests near the homes of Tibetan families.

But Chinese scientists believe global warming is to blame for a steep decline in the bird populations and types.

“Global warming has become a reality here,” said Chen Dongmei, director of the World Wildlife Fund’s climate change and energy program in China. “Everyone can feel that there has been a change in Beijing’s attitude toward climate change over the past few years.”

Secretary Paulson fully understands this issue. “The only way to make progress on climate change is to engage all the large economies, developed and developing, to work toward embracing cleaner technology and reducing emissions,” Paulson said in a statement. “What’s happening with the environment in the middle of China not only affects the local climate and economy but also the global climate and economy.”

Though Beijing has imposed rigid pollution and greenhouse gas emission limits local governments are continuing to invest in dirty, resource-intense industries, jeopardizing Beijing’s goals of saving energy and cutting pollution.

On Monday, July 23, , the China Daily newspaper reported that some regions are encouraging steel, cement and other heavy industries to boost economic growth despite demands from Beijing to rein in those sectors. The central government in Beijing is being ignored.

“The central government is committed to achieving the (green) targets but some local governments have turned a blind eye to them,” said He Bingguang, a deputy director with the National Development and Reform Commission.

This is a dilemma Secretary Paulson will share with his number one host, President Hu Jintao. Both men should be uncomfortable with this tar baby: a problem seemingly too large to solve.

胡锦涛
Hu Jintao
Hu Jintao

Intellectual Property Rights

This has been a stumbling point between the two nations for a long time. American writers, film makers, computer software engineers and a host of others involved in the creative process of producing “intellectual property” expect that patents, copyrights, licenses, and other protections will ensure their work is not copied or stolen without proper reimbursement.

Chinese “entrepreneurs” do not believe in these copyright laws and freely copy just about everything for resale on the street.

China accounted for about 80 percent of the 14,775 shipments of counterfeit goods seized at U.S. ports last year, said W. Ralph Basham, commissioner of U.S. Customs and Border Protection.

I can remember buying pirated (illegally copied) expensive books in China in the 1970s. Books like the famous Oxford English Dictionary (OED), a tome that would cost hundreds of dollars in London, sold for just a few measly bucks in China. As I student I wanted reference books (this was before the internet, kids) and there was no place where reference books were less expensive than China. That was because the Chinese cared nothing for copyright laws or other such niceties.

Today, the U.S. is still deadlocked with China in bitter negotiations over Intellectual Property Rights.

Secretary Paulson will have his work cut out for him also because China feels defensive right now. The product safety scandal, which featured everything from tainted toys to tainted seafood, sent an alarm bell through China’s leadership. Just yesterday, the European Commission said, in so many words, that China’s promises to take corrective action haven’t resulted in the action Europe expected. And in Panama, lawmakers believe poisoned Chinese cough syrup killed more than 100 people.

International experts caution that there will be no arm twisting of the Beijing government by outsiders; especially on human rights and what Beijing considers “internal policy matters.”

Han Dongfang, the Hong Kong-based labor rights activist for the China Labour Bulletin organization, which monitors workers’ rights in China, insists “It’s about markets and it’s about cheap labor … Labor rights have become worse over the past few years.”

“The Chinese leadership does not care about international pressure. It is not China who is knocking at the door of the international community looking for favors — it is the other way around,” Han says.

Every indication is that this will be at least a somewhat tense meeting between Mr. Paulson and his Chinese hosts. Both sides will share the tension.

A Treasury Department insider told Peace and Freedom: “This is a tough diplomatic mission. But Secretary Paulson is a big boy and well versed in the issues. He’ll be successful and he’ll sleep.”

We’ll know if that is true, in part, at the end of next week.

Related:

China powering world economy

We documented many of the issues between the U.S. and China here:
China Planning a Surreal Facade for Summer Olympic Games: Beijing 2008

China and the U.S. are cooperating on IPRs but the going has not always proven as fruitful as these stories indicate:

China, FBI make $500M software piracy bust

China fails to deliver on product safety: European watchdog

China’s Counterfeiting Legacy
(By Les Lothringer in ShangHai)

China says pirated DVD production lines smuggled in

Human rights questions remain for China

From July 27:
Senate Panel Indicates Readiness to “Squeeze China” Over Currency