THE Chinese Government reaffirmed its commitment yesterday to regular high-level talks with the United States that visiting Treasury Secretary Henry Paulson hopes will help to pry open Chinese markets and speed the yuan’s rise.

Paulson began two days of talks in Beijing by meeting newly promoted Vice Premier Wang Qishan, who is taking charge of the U.S.-China “Strategic Economic Dialogue” (SED), which was launched in September 2006.

Wang told Paulson that the new Chinese Government, formally installed last month by the annual session of parliament, highly valued constructive and cooperative ties with the United States.

China attached particular importance to the twice-yearly SED, which addresses a spectrum of long-range issues ranging from energy saving to financial liberalization, said Wang, a former mayor of Beijing.

“We have reached a lot of common understandings, increased our mutual strategic trust and also made important contributions to promoting the steady growth of China-U.S. business relations and China-U.S. relations as a whole,” Wang said of the three SED sessions that have taken place so far.

Paulson said he looked forward to working with Wang and to preparing the next two rounds of the SED.

The next meeting is scheduled for June in Washington.

Paulson was a China veteran long before taking over the helm of the Treasury in mid-2006, making dozens of trips when he was chief executive of Wall Street investment bank Goldman Sachs, and enjoys exceptional access to China’s leaders.

The Treasury chief has emphasized the need to use diplomacy to convince China that it is in its own interest to open its markets wider and let the yuan rise more swiftly.

The Chinese central bank has in fact let the yuan climb much more quickly in recent months.

The currency gained 4 percent against the dollar in the first quarter, compared with 6.86 percent in all of 2007, as China used a stronger exchange rate as one of the tools to fight inflation, which is at a near 12-year high of 8.7 percent.

However, Tao Wang, head of Greater China economics with Bank of America in Beijing, said she did not expect this pace to last.

“Once the current inflation pressure abates and weak export numbers become obvious, the yuan/dollar adjustment is expected to slow,” she said in a report released yesterday.

Nor was any major change to China’s exchange rate policy likely to be announced either during Paulson’s visit to China or at next week’s meetings in Washington of the International Monetary Fund and the Group of Seven industrial nations.

“Given the uncertainties regarding the dollar and U.S. financial market, the exchange rate-related discussions in these meetings will likely be much more centered on dollar movements than yuan appreciation,” Wang wrote.

(SD-Agencies)

Vice Premier Wang Qishan (3rd R) meets with U.S. Treasury Secretary Henry Paulson (L) during a meeting at the Great Hall of the People in Beijing yesterday. The yuan dropped versus the dollar yesterday partly in response to a dollar surge overnight in overseas markets, but the Chinese currency may rebound after Paulson ends a two-day China visit.

SD-Agencies