Paulson Ends China Visit With Little Progress but Gratified to Be Talking

September 23, 2006 Paulson Ends China Visit With Little Progress but Gratified to Be Talking By STEVEN R. WEISMAN BEIJING, Sept. 22 — Treasury Secretary Henry M. Paulson Jr., winding up a four-day visit to China, met Friday with President Hu Jintao and Prime Minister Wen Jiabao and said afterward that he was encouraged by their willingness to engage in a new effort to resolve economic disputes between the countries. Mr. Paulson and his aides, many with long experience in China, said his 50-minute session with Mr. Hu and 55-minute session with Mr. Wen were highly unusual for a Treasury secretary. Mr. Paulson’s predecessor, John W. Snow, met with Mr. Hu for only a couple of minutes when he was Treasury secretary. But United States officials continued to acknowledge that the trip was ending with no signs of progress on issues like Chinese currency policy, restrictions on China’s capital markets, trade disputes and the widespread piracy in China of software, movies and pharmaceuticals from the United States. “I enjoy meetings when they are not scripted, when there is a give and take and when they are substantive,” Mr. Paulson told reporters after the sessions, soon before leaving for Washington. “These two leaders knew their stuff, and there was a real discussion.” He was careful to provide few details of his talks, but his aides said that “this was a big deal,” as one put it, for the meetings to have taken place and for there to have been a considerable presence from the Chinese media. The main accomplishment of Mr. Paulson’s visit, which began Tuesday, was a new strategic economic dialogue between the United States and China. But officials acknowledge that the creation of a process does not equal achievement of results. Mr. Hu welcomed establishment of the dialogue, according to remarks reported by the official Xinhua news agency. Mr. Hu said the dialogue would serve the purpose of “making suggestions and supplying advice for high-level policy making by the two nations,” Xinhua said. Mr. Paulson summarized his visit to China as successful but said the results would not be seen until later. However, the issue has some urgency for the administration, with critics of China in Congress preparing to introduce legislation to punish the nation because of its currency practices. The main focus of the legislative action is a bill sponsored by Senators Charles E. Schumer, a New York Democrat, and Lindsey Graham, a South Carolina Republican, that would raise tariffs on Chinese imports by nearly 30 percent if China does not allow its currency to appreciate against the dollar. Such a shift would make exports from China more expensive and imports to China cheaper. Tony Fratto, the Treasury Department’s chief spokesman, said Mr. Paulson would speak to Mr. Schumer and Mr. Graham next week to try to persuade them to pull back their bill. Both have vowed to proceed with it if Mr. Paulson did not achieve progress. The bill is expected to be approved in the Senate but not the House. President Bush has vowed to veto it. Mr. Paulson argues that even Senate passage would be counterproductive, making the Chinese less likely to accommodate United States interests because they might be seen as yielding to pressure.