U.S. Treasury Secretary Henry Paulson met with Chinese President Hu Jintao in Beijing today, on the second and last day of what has been billed as a long-range "strategic economic dialogue" between the two powerful nations. CNBC’s Carl Quintanilla is traveling along with the U.S. delegation and on today's “Squawk Box,” revealed three major accomplishments that came out of the summit.
1) Beijing will allow the Nasdaq Stock Market and the New York Stock Exchange to open formal business offices in China.
2) both sides will meet again, in May in Washington DC
3) more flexibility is needed when it comes to the yuan.
Other than that - there was little forward momentum. When asked about the slow progress Paulson said “If you want immediate results it’s not realistic – it’s going to be modest things. We’re tackling some of the very biggest issues.”
Separately--Fed Chairman Ben Bernanke (who was on the trip) emphasized China’s need to make their Central Bank more independent. In written remarks Bernanke was supposed to call the yuan an “effective subsidy” – but when he spoke, he called it a “distortion.” Bernanke’s press secretary said it was a spontaneous decision - and according to Carl Quintanilla one that has caused a lot of buzz in China.
On CNBC’s "Squawk Box" former US Commerce Secretary Don Evans (and now CEO of The Financial Services Forum) offered perspective.
Evans said the one big problem China has right now – is that (Chinese) consumers are not nearly as active in their economy as (American consumers) are in the US." (Consumers drive about 70% of the GDP in the US and about 40% in China.)
"We need to take the financial services industry to China. Look at credit cards, in China 460 million have a cell phone and about a million have credit cards – (we need to help) consumers really become part of the economy."
Evans also said, "We made a lot of progress in the last 6 years in the economic relationship between the US and China. The message is – we want China to build a job creating economy and a market economy. Of course there’s always more work to be done. If you create more jobs in China, I promise you create more in America."