BEIJING Former U.S. Treasury Secretary Henry Paulson on Saturday said that the Sino-American relationship had grown "increasingly difficult and complex" and required "a fresh start".
"Both countries benefit from the $600 billion trading relationship, but there's no doubt that the deficit has widened, that there is a strong feeling in the U.S. that it's out of balance," he said.
"There are some very tough issues, we have some very significant differences ... To keep that relationship stable and on an even keel will be very important for business."
Paulson made his comments in Beijing at the China Development Forum, a three-day government conference bringing together top global chief executives with Chinese leaders.
Paulson's remarks come as U.S. Secretary of State Rex Tillerson arrives in China amid growing tensions between the two countries.
Charlene Barshefsky, a former U.S. trade negotiator, said in Beijing that the U.S.-China trade relationship is viewed in the U.S. as very skewed in favor of China, even by elites.
In order to move the relationship forward, China needs to return to reform and opening of its economy, and pull back from discriminatory measures against foreign firms, Barshefsky said.
"The best option is for China to renew its commitment to open markets and to put that into practice with respect to its own market."
RECIPROCITY A "SLIPPERY SLOPE"
Neither Paulson or Barshefsky were in favor of the U.S. engaging in trade reciprocity, the idea that Washington should close off parts of the U.S. economy to Chinese investment unless Beijing evened the playing field in its own market.
"I think that's a slippery slope, I think it's very dangerous, and I think it destroys what is one of the best parts of our economy being open," said Paulson.
Barshefsky said in comments to Reuters that such a practice could lead to unintended consequences.
"I have never believed in tit-for-tat reciprocity. This sounds to me like a crude mechanism that often leads to unintended consequences."
(Reporting by Matthew Miller; Additional reporting by Kevin Yao; Writing by Elias Glenn; Editing by Tom Hogue)