US economic team to pressure China on exchange rates, intellectual property

WASHINGTON, Dec 10, 2006 (AFP) – A stellar cast of US economic leaders heads to China this week to press for the world’s manufacturing workshop to overhaul the desperately one-sided trade between the two nations. Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke will head the US delegation for the inaugural meeting of a new “strategic economic dialogue” in Beijing on Thursday and Friday.

While designed to thrash out longer-term challenges thrown up by China’s headlong growth, including energy and environmental issues, the dialogue will also have to cover immediate irritants like China’s exchange rate regime.

A more flexible yuan would help China to allocate capital more efficiently, and so divert its mammoth savings to more productive uses, Paulson said Friday on the financial news network CNBC.

“The rest of the world is not going to tolerate China taking too long to make the sorts of adjustments in the currency that need to be made,” he said.

The US team has all the heavy economic hitters of President George W. Bush’s cabinet, including Commerce Secretary Carlos Gutierrez, Energy Secretary Sam Bodman and US Trade Representative (USTR) Susan Schwab.

“The group on