May 24, 2007	Thursday	Jamadi-ul-Awwal 07, 1428

WASHINGTON, May 23: The United States and China agreed on Wednesday to remove some barriers in financial services and the energy, environment and civil aviation sectors, US Treasury Secretary Henry Paulson said at the end of high-level economic talks here.

“We agreed on Wednesday on a wide variety of next steps, including significant items in financial services, energy and the environment, and civil aviation,” Paulson told a news conference after the conclusion of the two-day US-China “strategic economic dialogue” meeting.

He did not immediately give details on the agreements.

“Our relationship works best when it produces mutual benefits, which lead to growth, balance and a stronger global economy,” he said, flanked by Chinese Vice Premier Wu Yi.

Wu said the meeting tackled “short-term hotspot issues” with “specific deliverables” realised.Wu led the Chinese delegation to the high-level talks, the second in the “strategic economic dialogue” established last year by President George W. Bush and his Chinese counterpart Hu Jintao.

The Chinese vice premier is to meet with Bush on Thursday at the White House, the Bush administration said. One of the so-called “short” issues identified at the meeting was the need for a rapid Chinese currency appreciation but neither Paulson nor Wu mentioned the issue.

She said “positive results” were achieved on such issues as global energy security and environmental protection.

The two countries were closely linked and should resolve issues through negotiations rather than “threats or sanctions,” she said.

“We agree on many issues,” Paulson said, citing bilateral meetings in the last five months to discuss shared economic interests.

“We agree that it is vital to the prosperity of both our nations, that China rebalance its economic growth, encourage consumption and spread development more broadly among its people,” the US Treasury chief said.

“We agree that by combining the power of our economies, we can spur further development of clean energy technology. We agree that strengthening and deepening our two-way trading relationship will create jobs and give our citizens a wider variety of choices and lower prices on goods.”

CURRENCY: China has agreed on the need for greater flexibility of its yuan currency, a key US demand to help contain a ballooning trade deficit, US Treasury Secretary Henry Paulson said on Wednesday.

“The Chinese clearly see the need and stated the principle of greater renminbi flexibility,” he told reporters at the end of high-level bilateral talks, referring to the Chinese yuan currency.

Paulson said China had agreed to remove a barrier on the entry of new foreign securities firms and resume licensing securities companies, including joint ventures, in the second half of 2007, as part of major financial reform.

“The renminbi and the rate of appreciation, degree of flexibility is an important economic issue,” the US Treasury chief said.

“It is an important issue in trade flows, and even more importantly becomes the symbol for the pace of reforms of the Chinese economy.”

“The Chinese have taken some steps to increase the flexibility of the exchange rate,” he said.

—AFP