Congratulations to Treasury Secretary Hank Paulson for just setting yet another new low in kowtowing to China.

Multilateral pressure is one of the two main pillars of Paulson’s fake strategy for speeding up appreciation of China’s grossly undervalued currency.  So he must have been hopping mad when, just before the Group of Seven industrialized countries’ October 19 statement bluntly calling for China to step on the appreciation gas, senior Chinese financial official Wu Xiaoling made Beijing’s continuing stonewalling clearer than ever.  After all, China’s refusal to play along only harms Paulson’s remaining credibility with Congress and the public.

Instead, Paulson ramped up the groveling.  Speaking to reporters that night, the Secretary praised China’s currency reforms to date.  And when asked by reporters about Wu’s statement, he responded, “I just happen to think there is more risk in moving too slow than too quickly.”  The clear message to China: “Don’t mind me or my opinions.  I’m just Secretary of the Treasury of the United States.”

Four days later, speaking to a conference in Washington, Paulson had the chutzpah to claim that “Dialogue among senior Chinese and American officials” can’t be simply about “talking for the sake of talking” but must involve “specifying consequences.”  Of course, Paulson dropped the consequences point immediately, once again showing that his goal – and the president’s – remains preserving a U.S.-China trade status quo that has devastated domestic manufacturing wealth-creators, but benefitted his former Wall Street colleagues and offshoring-happy multinational manufacturers.  But at least the Secretary could humor us – a rebuild a bit of his country’s honor – by getting off his knees.

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