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WASHINGTON : US Treasury Secretary Henry Paulson on Tuesday welcomed China's progress in allowing its currency to rise and called for more Chinese investment in the United States.
"Congress has been satisfied that we're making progress" in encouraging China to allow the yuan, or renminbi, to appreciate, he said in a teleconference with reporters.
Critics in the US legislature say that Beijing keeps the yuan undervalued to maintain an unfair trade advantage, making Chinese exports relatively cheaper.
Paulson pointed out that the yuan has climbed against the greenback by 25 percent in inflation-adjusted terms since July 2005, when the Chinese government first unpegged it from the US currency.
But he underscored that the yuan actually had more room to rise because of the dollar's decline against other currencies.
"Given the movement of the dollar, the renminbi hasn't appreciated as dramatically, as significantly as against some other currencies like the euro and the yen," he said.
"And so I think one of the things we've tried to do, and we've done with some success, is encourage other countries to speak about this topic and to engage with the Chinese very directly on it."
The Treasury chief said the United States is trying to negotiate a bilateral investment treaty with China as part of the US-China Strategic Economic Dialogue, a series of high-level economic talks.
"There's a lot of US investment in China and to get the protections that our investors need is something that's important and difficult to do ... on the other hand there's very little investment that the Chinese have in the US and we think it would be a positive for both of our countries to have them have more investment in the US."
Paulson suggested that some of the Chinese reluctance to invest in the US may be due to a lack of understanding of the US process or not wanting investments to be criticised.
"The Chinese sometimes question whether their investment is welcome here," he said.
Getting better protection for investors on both sides would be a "milestone" and a "positive step" for bilateral relations, he said.
"The highest vote of confidence anyone can give our economy is to make a long-term investment." - AFP/de
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