Who is Paulson kidding?
Is it any wonder America is so hated around the world? Just look at the news from the economic conference in China:
China needs a stronger currency to fend off inflation, US Treasury Secretary Henry Paulson said on Wednesday, drawing a cool response from Chinese officials already upset by Washington’s lecturing on food safety.
The disagreements, aired on the first day of a two-day ”strategic economic dialogue” near Beijing, underscored the growing complexity of a relationship that Paulson said was now central to maintaining global economic prosperity.
”China’s leaders have voiced concerns about China’s macroeconomic stability, in particular mounting inflation, growing asset bubbles and possible overheating. A more flexible exchange rate policy is especially important to China now, given these risks,” Paulson said.
Please pause a moment to take in the sheer hubris of Paulson's hectoring the Chinese — the blatant yet unstated "America knows best" mentality behind it. And the sheer irony — he's telling them they need a stronger currency to head off inflation? The mind reels.
Of course, the Chinese weren't fooled by this line for a minute, as another account of the conference shows:
China's vice minister of commerce, Chen Deming, said a weakening US dollar was a bigger global economic concern than the value of the yuan.
"(The yuan) is not the key issue. Currently my focus is more on the depreciation of the US dollar and its possible impact and repercussions for the world economy," Chen told reporters on the sidelines of the conference.
"I sincerely wish to see a scenario where the US economy is getting stronger and the US dollar is getting stronger."
In her opening remarks to the third Sino-US Strategic Economic Dialogue, the head of China's delegation, Vice Premier Wu Yi, also told the United States bluntly to fix its own problems rather than complain about China.
"Obviously, to resort to trade protectionism and blame another country for the structural problems in the US economy is the wrong approach which would only harm the interest of the United States itself," Wu said.
As we've noted before, the time will come when China will let the yuan float freely. Paulson may or may not be in office when it happens, but when it does he'll get exactly what he wants — good and hard.