Hank Paulson, US treasury secretary, will on Monday begin a series of
discussions with US industry leaders to hammer out the Bush
administration's policy towards China ahead of a high-level delegation to
Beijing next week.
former head of Goldman Sachs, an investment bank, will on Monday meet executives
from manufacturing companies, including Procter & Gamble, before on
Wednesday sitting down with financial services companies - including
Citigroup - as well as those from other sectors.
A Treasury official said Mr Paulson was "reaching out on his China agenda"
before heading to Beijing for a "strategic economic dialogue" that will include
top-ranking cabinet officials and Ben Bernanke, Federal Reserve chairman.
The delegation will press for greater currency flexibility, but Mr Paulson
also wants to cultivate an intimate discourse about long-term economic goals
with the Beijing leadership, many of whom he knows personally from his time at
Mr Paulson's negotiating tactics will on Monday be questioned by impatient
manufacturers, who blame China for a record US trade deficit of more than
$200 billion by maintaining a cheap currency.
Frank Vargo, from the National Association of Manufacturers, said executives
would "make sure he understands how frustrated manufacturers are over China's
currency", suggesting there would be a "pretty vocal back-and-forth discussion".
Mr Vargo praised the Treasury secretary as "a guy who exudes confidence he
can get the job done", but said there was demand for "action early next year"
from key figures such as Doug Oberhelman, head of Caterpillar, and John Surma,
president of US Steel.
Some manufacturers are understood to be ready to throw their political and
financial weight behind Democratic lawmakers who are threatening to initiate
punitive sanctions against China in the wake of the mid-term elections.
But among financial services groups there is support for Mr Paulson's patient
pursuit of reforms that would give them access to sectors such as pensions,
insurance, and broking.
Jeremie Waterman, a director at the US Chamber of Commerce, said the goal of
the dialogue for business was to "institute practices to allow mergers and
acquisitions, allow trade and allow capital to flow freely." He said there was
widespread corporate backing for Mr Paulson.
Susan Schwab, the US trade representative, will also meet business leaders
this week as she prepares for the China visit and holds separate talks with
South Korea in Montana in a frantic bid to reach a free-trade deal.
The five-day negotiations with South Korea are seen as the last chance to
agree the outline of a bilateral trade pact before President George W. Bush's
special fast-track trade promotion authority expires this summer.
A US trade official said: "We need to move the ball down the field this week
to have a realistic chance of completing a deal in time."
Negotiators were downbeat about the prospect of a breakthrough despite signs
of US concessions on the most politically-sensitive issues for Seoul, where
there have been mass protests against the deal.