WHEN: Today, Wednesday, April 15th
WHERE: CNBC's "Squawk Box"
Following are excerpts from the unofficial transcript on a CNBC interview with former Treasury Secretary Hank Paulson on CNBC's "Squawk Box" (M-F, 6AM-9AM ET) today. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000369874, http://video.cnbc.com/gallery/?video=3000371243, http://video.cnbc.com/gallery/?video=3000371216 and http://video.cnbc.com/gallery/?video=3000371244.
All references must be sourced to CNBC.
PAULSON ON BEING STRATEGIC
I think we need to be really quite strategic here. We need to maintain our own strength. Be strong militarily, economically, diplomatically, be active. But we need to, I think, make an even bigger effort because it is more and more challenging to get important things done.
PAULSON ON CHINA RUNNING OUT OF STEAM
I'm not surprised by the growth rate and the growth rate isn't really what I look at. I look at the source of the growth. China has had great economic successes we all know and taken hundreds of millions of people out of poverty, second largest economy in the world. This is a country that has a growth model that is running out of steam.
PAULSON ON CHINA PROBLEMS
They had a set of policies that served them very well for a long time. Anyone that says they've developed a better form of capitalism, I think, is wrong. They've got some monumental problems, they're working to address them. I've said over and over again that there is as big a risk overestimating China's strength as there is in underestimating it.
PAULSON ON CHINA/U.S. RELATIONSHIP
I believe this is by far our most important bilateral relationship and it's becoming more complicated and more difficult because China is now a formidable competitor in addition to a partner. We need to figure out how to manage the competition so it's healthy competition. We shouldn't shrink from competition.
PAULSON ON U.S. MONETARY POLICY
When you realize where the U.S. economy is today and we've essentially been growing since the last quarter of 2009 delevering. I think this has been monetary policy that has worked the way that it was supposed to work.
PAULSON ON STRONG DOLLAR
What makes the United States a great economy is we believe in markets. We have a market determined dollar. That's why it's a global reserve currency. Even during the height of the financial crisis everyone wanted dollars because they knew they could sell at any time. I just believe in a market driven dollar.
PAULSON ON JEB BUSH
The Republicans have a number of excellent candidates. I personally favor Jeb Bush because he's experienced. I think he's done a good job in Florida and I view him as someone who is able to work across. I think he's got the economic answers we need and I think he'll work across party lines and I like his positions on immigration.
PAULSON ON MARKET MAKING
One of the things that concerns me the most is what's happening to market making because I think that many people don't understand the incredibly important role banks and investments banks and institutions play in helping people manage risks and providing liquidity to the markets.
PAULSON ON THE FED
People are addicted to these low rates. So I think the question we are all discussing is when and how. And when I look at the economic numbers, and look at the dollar, I bet that – you know, who knows, but, the Fed takes a longer time. But you know, I tend to be someone who says I would like to go sooner rather than later.
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