Paulson

The United States and China should cooper-ate to bring their trade relationship into balance and not complicate the situation by taking a confrontational approach, a senior Chinese official said on Tuesday.

"Problems and contradictions emerging in the development of China-U.S. trade and economic relations should be taken calmly and handled properly," said Chinese Vice Premier Wu Yi who is in Washington for follow-up talks on economic cooperation.

"Politicising trade and economic issues is absolutely unacceptable since it is of no help at all but will make the situation more complicated."

U.S. Treasury Secretary Henry Paulson said on Tuesday that rising anti-China sentiment in the United States was being fuelled by growing trade and financial imbalances, and officials from both sides needed to find ways to ease such tensions.

In remarks prepared for the opening of two days of high-level talks, Paulson said both countries face challenges of domestic pro-tectionism and questions about the merits of trade and globalisation.

Growing scepticism

"There is a growing scepticism in each country about the others' intentions," Paulson said. "Unfortunately, in America, this is manifesting itself as anti-China sentiment as China becomes a symbol of the real and imagined downside of global competition. That argument is fuelled by the evidence of persistent trade and financial imbalances."

Paulson said that while U.S. and Chinese officials may agree on the direction of re-forms and other efforts to open the Chinese economy, the pace of such changes needed to quicken.

-Reuters