{"page":"\u003clink rel=\"stylesheet\" href=\"https://lessonplanet.com/assets/packs/css/resources-c03aa079.css\" /\u003e\n\u003clink rel=\"stylesheet\" href=\"https://lessonplanet.com/assets/packs/css/lp_boclips_stylesheets-517835be.css\" media=\"all\" /\u003e\n\u003cdiv data-title='Treasury Secretary comment on China-US trade deficit' data-url='/boclips/videos/5c54c486d8eafeecae169707' data-video-url='/boclips/videos/5c54c486d8eafeecae169707' id='bo_player_modal'\u003e\n\u003cdiv class='boclips-resource-page modal-dialog panel-container'\u003e\n\u003cdiv class='react-notifications-root'\u003e\u003c/div\u003e\n\u003cdiv class='rp-header'\u003e\n\u003cdiv class='rp-type'\u003e\n\u003ci aria-hidden='true' class='fai fa-regular fa-circle-play'\u003e\u003c/i\u003e\nVideo\n\u003c/div\u003e\n\u003ch1 class='rp-title' id='video-title'\u003e\nTreasury Secretary comment on China-US trade deficit\n\u003c/h1\u003e\n\u003cdiv class='rp-actions'\u003e\n\u003cdiv class='mr-1'\u003e\n\u003ca class=\"btn btn-success\" data-posthog-event=\"Signup: LP Signup Activity\" data-posthog-location=\"body_link_boclips\" data-remote=\"true\" href=\"/subscription/new\"\u003e\u003cspan\u003e\u003cspan\u003eGet Free Access\u003c/span\u003e\u003cspan class=\"\"\u003e for 10 Days\u003c/span\u003e\u003cspan\u003e!\u003c/span\u003e\u003c/span\u003e\u003c/a\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003cdiv class='rp-body'\u003e\n\u003cdiv class='rp-info'\u003e\n\u003cdiv aria-label='Hide resource details' class='rp-hide-info' role='button' tabindex='0'\u003e\u0026times;\u003c/div\u003e\n\u003ci aria-label='Expand resource details' class='rp-expand-info fai fa-solid fa-up-right-and-down-left-from-center' role='button' tabindex='0'\u003e\u003c/i\u003e\n\u003ci aria-label='Compress resource details' class='rp-compress-info fai fa-solid fa-down-left-and-up-right-to-center' role='button' tabindex='0'\u003e\u003c/i\u003e\n\u003cdiv class='rp-rating'\u003e\n\u003cspan class='resource-pool'\u003e\n\u003cspan class='pool-label'\u003ePublisher:\u003c/span\u003e\n\u003cspan class='pool-name'\u003e\n\u003cspan class='text'\u003e\u003ca data-publisher-id=\"30356011\" href=\"/search?publisher_ids%5B%5D=30356011\"\u003eCurated Video\u003c/a\u003e\u003c/span\u003e\n\u003c/span\u003e\n\u003c/span\u003e\n\u003c/div\u003e\n\u003cdiv class='rp-description'\u003e\n\u003cspan class='short-description'\u003e1. United States Treasury Secretary Henry Paulson sitting down2. Mid of Senate Banking Committee3. SOUNDBITE: (English) Henry Paulson, US Treasury Secretary:\"China's currency policy is a key factor in our economic relationship. China...\u003c/span\u003e\n\u003cspan class='full-description hide'\u003e1. United States Treasury Secretary Henry Paulson sitting down\u003cbr/\u003e2. Mid of Senate Banking Committee\u003cbr/\u003e3. SOUNDBITE: (English) Henry Paulson, US Treasury Secretary:\u003cbr/\u003e\"China's currency policy is a key factor in our economic relationship. China does not yet have the currency policy we want it to have and that it needs. Treasury's foreign exchange report clearly states that China's cautious approach to exchange rate reform exacerbates distortions in its domestic economy and impedes the adjustment of international imbalances. I look forward to discussing the report with you during this hearing. We are actively pressing the Chinese to introduce greater currency flexibility and undertake wider market reforms. We are seeing some results.\"\u003cbr/\u003e4. Wide of meeting\u003cbr/\u003e5. SOUNDBITE: (English) Henry Paulson, US Treasury Secretary:\u003cbr/\u003e\"China has introduced financial instruments to hedge foreign exchange risk and the Chinese government has begun to allow increased fluctuations in the currency. This is welcome progress but we need to see much more. Although China is moving faster it is still not moving fast enough. Nor is currency flexibility enough. A major objective of my two remaining years as Treasury Secretary will be pressing the Chinese government to advance toward the goal of a Renminbi (Chinese dollar) whose value is freely set in a competitive market place based upon economic fundamentals. I will work with the Chinese government to develop the market infrastructure they need for a freely floating currency.\"\u003cbr/\u003e6. Wide of meeting\u003cbr/\u003e7. SOUNDBITE: (English) Henry Paulson, US Treasury Secretary:\u003cbr/\u003e\"I want to be clear: Increased flexibility in the short run is absolutely necessary, but it is not sufficient. My goal is to make significant progress toward a fully market-determined, floating Chinese currency. The message I delivered to Chinese decision makers in the first meeting of our strategic economic dialogue in December is that they are not moving quickly enough to make their currency more flexible.  While they agree they need to increase currency flexibility and move to a floating exchange rate, they are not moving quickly enough for the United States, or the rest of the global community.  And they're not moving quickly enough for their own good.  The Chinese leaders believe there is risk in moving too quickly, when in fact, as I argued to them, the greater risk is in moving too slowly.   China may be in some respects a developing country, but it is also a large and powerful company.  The international community will run out of patience with China, unless the pace of its reform accelerates.\"\u003cbr/\u003e8. Wide of Paulson leaving\u003cbr/\u003eTreasury Secretary Henry Paulson insisted on Wednesday that new high-level talks with China offered the greatest chance of success in\u003cbr/\u003ereducing the soaring US trade deficit.\u003cbr/\u003eHe faced a sceptical Senate Banking Committee, where both Democratic and Republican senators said they believed China would listen only if the country faced punitive economic sanctions.\u003cbr/\u003ePaulson told the Committee progress had been made but added: \"Although China is moving faster it is still not moving fast enough. Nor is currency flexibility enough\".\u003cbr/\u003eThe lawmakers said nearly three (m) million manufacturing jobs had been lost since early 2001, a period during which the trade deficit had hit records for five consecutive years and the imbalance with China had soared to all-time highs.\u003cbr/\u003eMany senators said they were upset that the administration of US President George W. Bush did not cite China as a currency manipulator in a report it sent to Congress in December.\u003cbr/\u003eSuch a designation would have triggered negotiations with the Chinese and could have led to punitive sanctions against imports, had the United States filed and won a case before the World Trade Organisation.\u003cbr/\u003ePaulson said he believed a better approach was the new Strategic Economic Dialogue he began with the Chinese in December, involving seven members of the Bush Cabinet in meetings with top Chinese officials in Beijing.\u003cbr/\u003eHe said those twice-a-year discussions offered the best hope for persuading China to make the types of economic changes that would reduce the\u003cbr/\u003eUS-China trade gap. \u003cbr/\u003eHe said he would make the discussions a top priority in the two years left in the Bush administration. \u003cbr/\u003eThe next meeting is scheduled for May in Washington.\u003cbr/\u003e\"I will work with the Chinese government to develop the market infrastructure they need for a freely floating currency,\" Paulson said.\u003cbr/\u003ePaulson said pursuing economic sanctions against China could cause its government to abandon reform efforts for fear they would be seen as caving to foreign pressure.\u003cbr/\u003eBut the Senate Banking Committee's Democratic chairman, Christopher Dodd, said he believed events could quickly overtake Paulson's effort given the level of unhappiness in the United States over trade deficits and lost jobs.\u003cbr/\u003eSenators on the panel pressed Paulson to outline exactly how the administration planned to persuade China to move more quickly.\u003cbr/\u003ePaulson did not say whether the administration would support economic sanctions, although he did not rule out future WTO cases. \u003cbr/\u003eHe said he would press the Chinese to allow the value of the yuan to rise by larger amounts on a daily basis and to allow currency markets rather than government intervention to play more of a role in setting the yuan's value.\u003cbr/\u003eNo lawmakers suggested a specific alternative to Paulson's approach, although some did refer to a bill pushed last year by Senator Charles Schumer, a Democrat, and his Republican colleague Senator Lindsey Graham, that had gained widespread support. \u003cbr/\u003eIt would have imposed penalty tariffs of 27.5 percent on Chinese imports coming into the United States if China did not go further to revalue its currency.\u003cbr/\u003eAmerican manufacturers contend that China is manipulating its currency to keep it undervalued against the US dollar by 20 percent or more. \u003cbr/\u003eSuch an action makes Chinese goods cheaper for American consumers and American products more expensive in China.\u003cbr/\u003eChina in the summer of 2005 announced that it was removing the Chinese yuan from a fixed value against the dollar.\u003cbr/\u003eSince that time, it has risen in value against the dollar by 6.5 percent, but critics say that increase is far below what is needed to make a dent in the huge trade gap.\u003cbr/\u003ePaulson said he was not worried about the size of China's holdings of US assets including around 350 (b) billion US dollars (270.2 (b) billion euros) in US Treasury securities, saying this still represented a small amount  compared to the more than four (tr) trillion US dollars (3.1(tr) trillion euros) in federal debt held by the public.\u003cbr/\u003e\u003c/span\u003e\n\u003c/div\u003e\n\u003cdiv class='action-container flex justify-between'\u003e\n\u003cbutton aria-expanded='false' aria-label='Read more description' class='rp-full-description' type='button'\u003e\n\u003ci class='fai fa-solid fa-align-left'\u003e\u003c/i\u003e\n\u003cspan id='read_more'\u003eRead More\u003c/span\u003e\n\u003c/button\u003e\n\u003cdiv class='rp-report'\u003e\n\u003c/div\u003e\n\u003c/div\u003e\n\u003cdiv aria-labelledby='resource-details-heading' class='rp-info-section'\u003e\n\u003ch2 class='title' 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