Don't let US-China ties spiral out of control, ex-Treasury chief Paulson warns

Former U.S. Treasury Secretary Henry Paulson has called on Washington and Beijing to carefully manage their intensifying strategic competition, warning that a lack of trust between the two global powers now presents a greater danger than trade imbalances.

Paulson, who served as Treasury secretary under President George W. Bush, described the U.S.-China relationship as "the most consequential" in the world. He stressed the need for careful stewardship as rivalry sharpens across trade, technology, and security.

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We have to be careful that the decoupling does not become dysfunctional.

Speaking at a lunch in Beijing hosted by the Centre for China and Globalisation, Paulson, now chairman of the Paulson Institute, stated that while intense competition is inevitable, it must be managed. "The trick is going to be, while we're intensely competing, that we have guard rails," he said.

His remarks followed a recent summit in Beijing between President Xi Jinping and U.S. President Donald Trump, which marked the first visit by a U.S. president to China in nine years and included a delegation of 17 American CEOs. Paulson cautioned against a "dysfunctional" decoupling between the two nations.

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The trick is going to be, while we're intensely competing, that we have guard rails.