Amid all the talk on the declining dollar and the credit crunch, there is yet another problem facing Treasury Sec. Henry Paulson.
And its bothering manufacturers and lawmakers in the U.S. to the point, they can’t sit tight.
Paulson along with the Commerce Sec. among others will be visiting Beijing next week to continue the next round of the U.S.-China Strategic Economic Dialogue. And it will be the last such dialogue with Vice Premier Wu Yi as she is slated to retire soon.
She has been a staunch international politician, saying that China will "always" have its doors open to China, to remenisque uopn the Open Door policy that the west. once demanded from the Chinese – way back, some 200 years ago ( I may be wrong on the accuracy of that figure but nonetheless is a moot point to say that China will always open its doors to the U.S. – sort of like saying "I’ll always be there for you.").
The irony is that Paulson’s team follows a team of Europeans, including the ECB president Jean-Claude Trichet, who were given the cold shoulder when they ask for the appreciation of the yuan.
Complaints that the strong Euro against the dollar were hurting European businesses didn’t help any, either. The Chinese simply said, "that’s not our problem," We will allow the yuan to appreciate with time.
Paulson is also hoping to make headway on another front: safety of Chinese goods. Incidentally, the call for increased safety of everything from lead painted toys to antibiotic-treated shrimp comes after the world’s largest toymaker, Mattel Inc., publicly offered an apology to China, saying that design flaws were to blame for a recall that they conducted with the consumre safety watchdog in the U.S.
Nonetheless, in a related incident, one Chinese propreiter who was linked to a recall involving lead-tainted toys committed suicide. Not to mention a hardline stand by the Chinese communitst government to execute an official who was responsible for safety issues.- a bit extreme?
On aggregrate, Paulson is hoping to make some progress on the safety front and believes that China will come together to allow the yuan to rise faster.