Paulson says embrace globalization, China
U.S. Treasury Secretary Henry Paulson Jr. said Friday area companies should embrace globalization, including trade with China, to help boost profits here.
But China needs to move quickly with its own reform before companies here will relax their views of alleged currency manipulation, intellectual property theft and under-cutting prices.
"We need to seize this opportunity now," Paulson said during an interview. "… The vast majority don't feel trade benefits are shared fairly, but we're working on that."
Paulson was in the Chicago area Thursday and Friday, including a visit at Chicago-based Atlas Material Testing Technology, which manufactures equipment that simulates weather conditions for clients who want to test their products' durability.
He talked on a wide array of international topics, and his Barrington Hills roots were quite evident.
On Thursday, he had dinner with his mother, stayed at his Barrington Hills home and watched the Cubs game.
Before leading the Treasury, Paulson was chairman and chief executive officer of Goldman Sachs in Chicago. He joined the firm in 1974.
On Friday, he made a few stops, including at Atlas, where he told workers trade and globalization are vital for American companies to prosper.
"Globalization is here to stay, and it is important that we continue to benefit from it rather than retreat into isolationism," Paulson said.
Trade agreements with many countries, including China, will help in the long run, he said.
"I recognize that China has become a big political issue -- due, in part, to their own actions and also because China has become a symbol for globalization fears," Paulson admitted.
But keeping the U.S.-China relationship on an "even keel" is critical "to persuade the Chinese to reform their own economy more quickly because the health of their economy affects the health of the global economy," he said.
Still, he and Congress are "impatient" with China.
"Legislation that would impose unilateral, punitive trade sanctions isn't the answer," he said. "I don't want to start a trade war. Punitive trade legislation could have enormous repercussions, especially when we are working to extend our economic expansion and get through a turbulent time in our markets."
Paulson said openness to trade and competition will help job creation in the long-run.
"In our rapidly changing economy, we see job losses and dislocations in particular companies, industries, and even regions -- just as there are new opportunities in others," Paulson said. "But making trade a scapegoat and enacting protectionist policies would make us worse off. We should recognize the hardships and work to alleviate them, while keeping in sight the higher living standards Americans enjoy as a result of economic dynamism."