Apart from two interpreters, nobody knows precisely what President Hu Jintao and US Treasury Secretary Henry Paulson discussed during their 15-minute private conversation in Beijing. But we got a good idea from subsequent financial and political events.
The yuan began to gain at its fastest trot since the direct link with the dollar was severed in July last year. Paulson's plane had hardly touched down back in Washington when Senators Lindsey Graham and Charles Schumer hastily jettisoned their proposal to slap 27.5% tariffs on Chinese imports designed to pressure Beijing into substantially revaluing its currency.
Having generated personal publicity from a bill that had little chance of becoming law, Chuck and Lindsey retreated.
Although they may introduce a more refined version of their bill next year, the senators expressed the hope that the treasury secretary could resolve the impasse using his personal connections in China. He has certainly got those in spades. Paulson already knew seven of the eight Chinese leaders he met in Beijing from the 70 trips he made as CEO of Goldman Sachs.
Bald and imposing, Paulson has already staked out a role as the US government co-ordinator on a wide range of issues beyond those normally handled by the Treasury.
Within days of his appointment, he pledged to seek a bipartisan compromise with Congress to shore up the creaking federal benefit programs, social security and Medicare. When babies born between 1946 and 1964 begin to retire in 2008 the system will come under growing strain.
Social security solution
Worth around US$800 million, Paulson won't be worrying much about his own retirement. But he says the national crisis is fixable, given a sustained expanding economy. A further deterioration in the fiscal and current account situation would raise the specter of foreign and domestic holders of US bonds moving their money (although there is little sign of that yet). Paulson has vowed to promote a strong dollar and he is a sturdy supporter of free trade.
Wall Street is pleased to have one of its own at Treasury for the first time since the patrician Robert Rubin served in the Clinton administration.
Paulson has already raised the stature of the office, something that was badly needed. It would be unkind to call John Snow a flake, but he had little credibility on Capitol Hill, acting as messenger for others.
What came out of the Beijing visit was a commitment to a twice yearly economic meeting led by Vice Premier Wu Yi and Paulson. At worst, this would buy a little time, during which the protectionist sentiment in the US could possibly subside.
There is at least a chance that a gradually appreciating yuan might become aligned with Chinese self-interest. External imbalances, including monster trade surpluses and the US$1 trillion or so in foreign exchange reserves are part of the problem. So a more flexible approach on the currency could be part of the solution.
Critics say this is just another talk-shop and that Paulson can't negotiate a better outcome than another bureaucrat.
The fact is, though, that people do matter to the Chinese leadership.
Beijing is said to have been distinctly underwhelmed by the naming of Nicholas Burns as state department undersecretary for political affairs to the Sino-US strategic trade dialogue to replace the well-liked Robert Zoellick who resigned in June.
Zoellick held cabinet rank, as does his counterpart Vice-Minister of Foreign Affairs Dai Bingguo. The feeling is that career diplomat Burns might have to be promoted to deputy secretary of state to cut the mustard with Beijing.
Not so Paulson. With a lasting economic partnership between the US and China in his sights, the biggest problem is that he only has just over two years to achieve it.
