US government seeks help from China

American manufacturers find that the main reason for the gap between the prices on the goods produced in the two countries. 

The Treasury Department announced last month that China has become the largest foreign holder of U.S. Treasury securities owning almost $1 per $10 in U.S. public debt.

Treasury Secretary Henry Paulson praised the Chinese for the rise of more than 20 percent in their currency against the dollar since July 2005. But he said it was critical that the currency reforms are continued. The U.S. trade deficit with China had widened in October to $27.8 billion, which made the largest monthly trade gap with a single country recorded so far.

Paulson said it was important that in order to support economic growth China relies more on domestic demand than on exports.

Paulson stated that, though the talks have worked at shortening the differences between the two countries, they have not reached the expected results. He added that he is hopeful the new administration will continue the dialogue. 

President-elect Barack Obama has not stated his opinion on continuing the current format for discussions.