Paulson to raise currency, Tibet with China at economic talks

WASHINGTON (AFP) — Treasury Secretary Henry Paulson will raise US concerns about the pace of China's currency appreciation and Tibet unrest at bilateral economic talks next week in Beijing, a senior US official said Friday.

China's yuan currency has increasingly appreciated in the past two years and that pace "should continue," said Alan Holmer, special envoy for China and the US-China Strategic Economic Dialogue.

The yuan, or renminbi, had gained "a little over 18 percent" since July 2005, he said.

"The accelerating rate of appreciation is significant and welcome and we believe it should continue," he told a news conference on Paulson's trip next week to China.

President George W. Bush's administration has stressed the need for dialogue with China on the sensitive issue, battling US lawmakers' moves to punish China for allegedly keeping its yuan undervalued to support the ballooning Chinese trade surplus with the US that critics say has cost American jobs.

The "best way" to encourage the Chinese government to liberalize its economy is "through intensive dialogue," he said, citing the SED framework and Paulson's talks with the International Monetary Fund and other organizations.

Paulson is set to meet with Chinese government officials, including the newly appointed leadership, next Wednesday and Thursday as part of the Strategic Economic Dialogue.

The bilateral framework to address economic issues of mutual concern was launched by Bush and his Chinese counterpart, Hu Jintao, in 2006.

Paulson's visit will help lay the groundwork for the fourth cabinet-level SED meeting in June in Washington, Holmer said.

The Treasury envoy emphasized that it was "very important" for Paulson to engage the new leadership in China after the National People's Congress earlier this month named President Hu to another five-year term and elected four vice premiers.

"The meeting will be important as new relationships are formed," he added.

Paulson also will take the opportunity to directly raise US concerns about deadly unrest in Tibet with Chinese officials, Holmer said.

"All senior US officials do raise our concerns with respect to Tibet and this trip will be no different," he said.

His remarks came as Bush for the first time publicly urged China to hold talks with representatives of Tibet's spiritual leader, the Dalai Lama, after raising concerns over deadly turmoil in the Himalayan territory.

Bush said that he had told Hu that it was in China's interest that his government "sit down again with representatives of the Dalai Lama" and "urged for restraint" from Beijing.

The protests began in Lhasa on March 10 to mark the anniversary of a failed 1959 uprising against Chinese rule in Tibet, an event that saw the Dalai Lama flee to India where he has since lived in exile.

Paulson is set to address China's Academy of Sciences on Thursday about energy and environment issues and the ongoing collaboration between the two largest consumers of natural resources, Holmer said.

At the third cabinet-level SED meeting, in December in Beijing, both sides agreed to "conduct extensive cooperation" over a 10-year period that will address energy, the environment and climate change.

They said the collaboration would advance technological innovation and the adoption of highly efficient, clean-energy technology, and promote the sustainability of natural resources.