Brief article for MARKET NEWS on remarks by Treasury Secretary Hank Paulson, November 2007

 

US's Paulson Q&A: US To Grow Despite Problems


By Sheila Mullan and Carolyn Crapo

 

     NEW YORK (MNI - Treasury Secretary Hank Paulson Thursday night told the China Institute Executive Summit that the U.S. economy "will continue to grow" due to despite housing market problems and financial market turbulence because of the economy's underlying strength.

 

     Paulson noted that the U.S. is "going through some turbulence in our capital markets" and also is facing housing market problems.

 

     Answering questions after his speech, Paulson said, "I've been pretty clear in acknowledging that we're going through some turbulence in our capital markets. Risk is being reassessed and repriced."

 

     "It's going to take us a while," he continued, "to work through that."

 

     Paulson also noted issues in the housing market, saying "we're in a housing slump" which will take a while to work through.

 

     "We're working through it against the backdrop of a very healthy economy, a very strong global economy and a very healthy U.S. economy and I believe we are going to continue to grow as we work our way through that, because of the strength in the economy," he said.

    

     Paulson was also asked about China 's RMB, of which he said, "The issue is that the RMB is simply not market determined. I don't think anyone I talk to thinks China is ready for a market-determined interest but everyone thinks it should be taking steps" to become such eventually and "in the nearer term, should be appreciating the RMB more rapidly."

 

     "In terms of the dollar," he said, "You've heard me say that a strong dollar is in our nation's interest and that a currency should be determined by economic fundamentals."

 

     He also urged China to liberalize further incoming foreign investment and that part of his job is to sell the benefits of open markets to the American people. "Part of this going to be able to say China is committed to open markets," he said.