"The Financial Services Forum congratulates Treasury Secretary Paulson and Vice Premier Wang Qishan on the progress achieved at the fourth round of the U.S.-China Strategic Economic Dialogue. The results are important and demonstrate the need to continue such high level engagement into the future. By providing an overarching framework for the examination of long-term strategic issues, as well as coordination of ongoing bilateral policy discussions, the SED facilitates economic cooperation between the United States and China. Such close cooperation is essential to ensuring that our two nations effectively address common economic challenges, that China achieves its stated goal of building a more diversified economy based on open markets, and that the citizens of both nations mutually benefit from the growing bilateral economic relationship.

"Continued reform and modernization of China’s financial sector has been a central focus of the SED, and rightly so. China’s economy is the world’s third largest and fastest growing – and yet it is supported by an underdeveloped financial system. To achieve its own economic goals of maintaining high rates of growth and job creation, building a more services-based, consumer-driven economy, reducing poverty, and ensuring a more equitable distribution of opportunity and prosperity, China needs a world-class financial sector.

"The fastest way for China to acquire a modern financial system is to open its financial sector to greater participation by foreign financial services firms. By providing world-class expertise and know-how, along with the financial products and services that China’s citizens and businesses need to save, invest, insure against risk, and consume at higher levels, foreign financial institutions can help China develop the financial sector it needs to support a more diverse, mature, and stable Chinese economy.

"It is important to emphasize that the correction in the U.S. housing market and its impact on financial markets should not be interpreted as reason to slow the pace of financial reform in China.

"A modern and efficient financial system facilitates and speeds an economy’s ability to deal with and move beyond occasional challenges by providing the institutional and technological infrastructure for the recalibration of risk, the swift re-pricing and disposal of problem assets, and the remobilization of competitively priced capital that fuels economic renewal – all of which promotes economic flexibility, resilience, and stability.

"China has accomplished much toward modernizing its financial sector and the United States applauds such progress. But to achieve its stated economic goals of maintaining high rates of growth and job creation, building a more services-based, consumer-driven economy, reducing poverty, and ensuring a more equitable distribution of opportunity and prosperity, China must more quickly avail itself of the power and advantages of a modern and effective financial system, which includes greater foreign participation. The Forum is convinced that the Strategic Economic Dialogue is a critical means of achieving further progress toward that end."