Paulson warns US-China ties must avoid spiraling conflict

Former US Treasury Secretary Henry Paulson has called on the United States and China to carefully manage their intensifying strategic competition to prevent it from escalating into a broader conflict. Speaking at an event in Beijing hosted by the Centre for China and Globalisation, Paulson stated that deepening distrust between the two global powers now represents a greater risk than trade imbalances.

Paulson, who previously served as Treasury Secretary from 2006 to 2009 and led the US side of the US-China Strategic Economic Dialogue, stressed that while intense competition is inevitable, it must be managed with clear "guard rails." He described the US-China relationship as "the most consequential" in the world, requiring careful stewardship across trade, technology, and security domains to avoid "dysfunctional decoupling."

His remarks followed a significant summit in Beijing where US President Donald Trump met with Chinese President Xi Jinping. The two-day visit marked the first time a US president had traveled to China in nine years and involved discussions with 17 American CEOs.