In an Atlantic Council issue brief released today, former US Treasury Secretary Henry M. Paulson, Jr. argues that a new economic framework—reflecting the reality that China is no longer a “developing” economy but an increasingly established one—is needed to continue positive US-China economic relations and put the two economies on a path toward a more mutually beneficial structure.
The publication was launched at the event Next Steps in US-China Relations: A Conversation with Hank Paulson and Steve Hadley on July 17.
The issue brief, which serves as a memo from Paulson to the winner of the 2012 US presidential elections, outlines five key principles that must be adopted if the United States is to improve economic ties with China and ultimately ensure globally competitiveness and economic strength:
- Unlock the promise of capital and cross-investment by assuringgreater openness to Chinese investment in the United States. This means China needs to pursue a market-determined currency that will better position it to respond to the current crisis, while preventing its own crisis down the road.
- Assure financial markets that are transparent and have strong oversight by correcting flawed practices on both sides of the Pacific that have led to massive producer and consumer debt.
- Work to strengthen market confidence in our economies, which, for the United States, means overcoming the markets’ lack of confidence in government’s ability to take the necessary steps to protect the US economy; and for China, it means overcoming a lack of transparency.
- Free up bilateral trade and grant China market economy status on a sector by sector basis.
- Help technology flow more efficiently and promote innovation by reforming the United States’ outdated export control system while still assuring national security.
This brief is the final report in the Atlantic Council’s Task Ahead project—a series of memos from senior policy practitioners to the winner of the November 2012 US presidential elections on the most pressing items on the international agenda. The original Task Ahead report featured memos from a bipartisan list of top-flight experts—including Madeleine K. Albright, Brent Scowcroft, James L. Jones, Jr., Chuck Hagel, Josef Ackermann, and Fran Townsend—offering recommendations for US policy on Iran, China, NATO, counterterrorism, supporting democracy, relaunching economic growth, and other pressing policy issues.