U.S. Treasury Secretary Aims to Broaden Access to China Market

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Dec. 2 – U.S. Treasury Secretary Henry Paulson is on his way to Beijing for the U.S.- China Strategic Economic Dialogue to begin on Thursday. One of his main goals include convincing Beijing to allow Wall Street greater access to the Chinese market, reports the Wall Street Journal.

Mr. Paulson is calling for more market access for American companies entering China. He will have a tough time arguing that Western investment banks, insurance companies and other financial firms will bring economic growth to the country.

According to the Business Cycle Dating Committee of the National Bureau of Economic Research, the United States has been in recession since December 2007. This is in addition to the U.S. markets currently saddled by its mortgage-backed securities.

The two-day talks will also include topics on cooperation on energy and the environment, and complementary responses to the global financial turmoil. Mr. Paulson said that the summit should continue to be a priority for America.

“They were looking at their teacher, and the problems we’ve had in our capital markets have certainly not been a good example to them as to why they should proceed with more reform,” Mr. Paulson told Wall Street Journal in an interview. He adds that he hopes to press China “to avoid the mistakes we’ve made but to continue with reform.”

Mr. Paulson, a former Goldman Sachs Group chief executive, has significant experience dealing with China, having visited the country more than 70 times. It was him that suggested that U.S. President George Bush and Chinese President Hu Jintao launch a regular meeting of cabinet officials to discuss long-term issues.

He is likely to replaced by his administration successor, New York Federal Reserve Bank President Timothy Geithner when President-elect Barack Obama takes office in seven weeks.

As early as December 2006, Mr. Paulson has said during the first round of talks that China’s market should open to Wall Street firms,”Increased openness in financial services can be a catalyst for investment and growth in all sectors of an economy.”

It is an effort that has faced resistance. “Did Paulson convince them to open up their domestic financial markets to international financial-services firms and a broader range of supposedly more-sophisticated financial products?” Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics told the Wall Street Journal.”Definitely not.”

Last week in Beijing, Zhu Guangyao, an assistant minister of finance told media: “China believes that the Strategic Economic Dialogue should continue and will continue.”