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"Canada can, within a positive friendly atmosphere, ask the Chinese government to resolve the Tibetan situation."

US's Paulson to raise Tibet, currency with sensitive China

April 2, 2008

BEIJING, Tue Apr 1, 2008 (Reuters) - U.S. Treasury Secretary Henry
Paulson is expected to mix some politics with the usual economic issues
when he meets top Chinese officials over two days at a time when
Beijing's sensitivity about its image is already high.

U.S. officials said ahead of Paulson's Wednesday and Thursday visit that
an expression of U.S. concern over Chinese treatment of protesters in
Tibet was on the agenda, just as it was for any high-level U.S. official
in contact with China.

While economic issues -- from investment to energy supplies and currency
rates -- are the focus of Paulson's visit, it comes amid calls for
actions up to and including a boycott of opening ceremonies for
Beijing's summer Olympics.

In Washington on Monday, the speaker of the U.S. House of
representatives, Nancy Pelosi, urged Bush to boycott the August
ceremonies because of the way China has dealt with unrest in Tibet.

China's President Hu Jintao has said security for the Olympics is a top
priority. Paulson is set to meet Hu on Wednesday but U.S. officials
offered no guidance about specific issues he will raise with the Chinese

In Washington last Friday, the Treasury's special envoy to China, Alan
Holmer, said Tibet would come up. "All senior U.S. officials do raise
our concerns with the Chinese with respect to Tibet and we'd expect this
trip to be no different," he said.

Paulson flew to Beijing on Tuesday after unveiling a blueprint for
streamlining regulation of U.S. financial services, a pressing concern
because of the global credit crisis triggered by U.S. mortgage debt.

China, the export powerhouse that supplies whole U.S. retail chains, has
indicated its special worry about the potential for global fallout if
America's free-spending consumers become so wary that they tip the U.S.
economy into recession.

"I am closely watching and feel deeply worried about the global economic
situation, especially the U.S. economy," Chinese Premier Wen Jiabao said
recently. Paulson is to meet Wen on Thursday, shortly before heading
back to Washington.

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

He begins his visit on Wednesday by meeting Wang Qishan, the former
Beijing mayor who was recently named one of four vice premiers by the
National People's Congress, the largely ceremonial parliament.

Wang is expected to take charge of financial affairs, including
directing the U.S.-China "strategic economic dialogue" that Paulson
helped initiate.

Paulson has placed great emphasis on the need to use diplomacy to
persuade China to adopt measures such as permitting its currency's value
to rise, though U.S. lawmakers say it is still far undervalued.

Holmer said last week that China has permitted an "accelerated rate of
appreciation (that) is welcome and appreciated" but Paulson is expected
to take up the issue of speedier appreciation again in Beijing.

(Reporting by Glenn Somerville; Editing by Ruth Pitchford)
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