The problems plaguing the US economy is of its own making and not caused by China, former US treasury secretary Henry Paulson told a forum held in Hong Kong on Monday.

He said that the two countries enjoy a "healthy relationship" and that there are a number of opportunities that can be tapped through "shared interest" and mutual cooperation.

"I never just focus on the renminbi, which is a symbol," Paulson said at the forum held by the University of Hong Kong.

The Chinese currency gained about 4.4 percent against the US dollar over the past year.

Paulson nevertheless urged that China should continue with its currency reform, arguing that it is in their interest and will help tame inflation.

At the forum titled Global Economic Outlook and China-US Economic Relations, the former treasury secretary who led the first round of the US-China Strategic Economic Dialogue in 2006, appealed against trade "protectionism", saying that it is the "enemy" of both countries.

Paulson also said that he believes that US imports from China are a great thing, as it helps to keep prices down and offers more choices for consumers.

Separately, Paulson said the world's biggest economy is grappling with a towering national debt, which he believes is "the most fundamental challenge" facing the US.

As of early 2011, the US government's national debt is in excess of $14 trillion.

Paulson thinks that although the US economy is improving, its housing market remains fragile. Housing prices may hit its trough early next year, he predicted.

The high unemployment rate in the US will also linger on for a while, despite the economy showing signs of picking up, said Paulson. The US unemployment rate in February reached 8.8 percent, a two-year low.

China Daily

(HK Edition 04/12/2011 page2)