Paulson: Protectionist laws aimed at China a mistake

US Treasury Secretary Henry Paulson has warned US lawmakers against blaming the loss of jobs at home on global competition and using it as a pretext to pass protectionist trade laws aimed at China.

Paulson, who returned to the US after a four-day visit to China late last week, joined Senate Finance Committee Chairman Max Baucus in his home state of Montana on Tuesday to discuss the importance of open market and free trade to encourage competition - an area the two agree on.

Baucus, however, rejected Paulson's advice that the US stick to a strategy of negotiation and dialogue to persuade China to revaluate its currency. Baucus said a firmer hand was needed to "deal with China".