In a wide-ranging interview with Maria Bartiromo, Mr. Paulson discusses the importance of an open economy in the U.S., the Dubai Ports controversy, Sarbanes-Oxley, taxes, China and global capital markets, among other topics.
Mr. HENRY PAULSON:Maria, for many, many years, there's been a bipartisan consensus in this country that an open economy is essential to our open--to our strength and our economic strength. And regrettably, I'm seeing signs that this consensus is beginning to erode here and elsewhere in the world. So a big objective of mine is to go on the offense and make it very clear that we're open for foreign investment and we appreciate the benefits of foreign investment to this country.
BARTIROMO:And we've seen a loss of IPOs. Some suggest it is this perception that the US has a reputation for high compliance costs, that's certainly increased litigation risks. To what extent that we--to the extent that we are actually have a problem losing business to international markets. What do you attribute it to?
Mr. PAULSON:Well, it's--first of all, Maria, what I'm really focused on tomorrow and the next day is foreign direct investment in the US and what I've seen is that foreign direct investment peaked in 2000. It's declined a bit, leveled off, it certainly hasn't grown commensurate with out economic growth. And as I've traveled around the world, there are some that in the wake of the Dubai Ports confusion and publicity are questioning whether we'll really welcome investment, whether we're erecting barriers. There are others that are raising questions about the perceived regulatory burdens or legal burdens in the US. I think it's too early to make any judgements whether this tailing off of the growth in foreign investment in the US is a temporary phenomena or it's a trend, but either way, we just want to make it very clear that we welcome foreign investment and it's vital to our economic strength going forward.
BARTIROMO:Well, I'm glad you mentioned the Dubai Ports. That's the one story that so many people talk about as sort of giving us a black eye a bit in America. How can we expect American companies to be welcomed acquiring companies around the world when, in fact, Dubai Ports wasn't allowed to acquire the company here because of a Middle Eastern background?
Mr. PAULSON:Well, Maria, I wasn't here at the time of the Dubai Ports, but I'll make a couple of points. First of all, national security is very important in this country, post 9/11. Very important in every country. We have a CIFIUS process in the US to make sure we're protecting our national security interests. I chair that process. It's my job to make it work. But it is very clear to me that we are open and we need to be open to foreign investment and I would just say to you the vast majority of investments in the US have nothing to do with national security, don't raise national security concerns. We reviewed as part of CIFIUS roughly 10 percent of the foreign investments in the US last year and a vast majority of vacations that we reviewed raised absolutely no controversy. So we're open to investment. We welcome investment from all parts of the world and it's just key to our--to creating jobs and opportunities in the US.