XINING, July 30 (Xinhua) --- Visiting U.S. Treasury Secretary Henry Paulson on Monday said China would make its own decisions on currency and called on the two countries to work together to combat global warming and climate changes.

    "The currency decision is our nation's major economic partner like China to make.... China makes that decision, let's say Chinese decision. So I think the right way for us to talk about the currency issue is on a bilateral or multilateral basis," Paulson told Xinhua in an exclusive interview.

    "Having a currency that reflects economic reality, that is reflective of economic fundamentals, is in China's best interest," he said.

    Paulson is on a four-day visit to China with the first stop inwest China's Qinghai Province to see environmental protection projects.

    Paulson spent all of Monday in Qinghai, visiting Qinghai Lake, the largest lake in China and an example of the environmental challenges faced by the country as well as the global nature of these problems. He also visited rural families and discussed environmental protection with local officials.

    "The environment issue is another important issue in the SED (China-U.S. Economic Strategic Dialogue). What's happening in terms of climate change globally is impacting the Qinghai-Tibet Plateau and what's happening here also impacts the global environment," Paulson said.

    "I was very impressed to see what the Chinese government has been doing here," Paulson said after visiting the lake.

    The government has spent over 470 million yuan (about 63 million U.S. dollars) on environmental protection in the past seven years, with 23,600 hectares farmland and 15,000 hectares of mountain land being turned into grasslands and forests.

    "China's plan targeting for energy efficiency goes a long way to make progress in carbon emissions," Paulson said, adding the key is that "we could work together on technology, especially on clean energy".

    Collaborating on energy and the environment is one of the key focuses of the SED, launched by U.S. President George W. Bush and Chinese President Hu Jintao last year to provide a focused and effective framework for addressing issues of mutual concern.

    Paulson will travel to Beijing on Tuesday to meet with Chinese leaders, including Hu and Vice Premier Wu Yi, to discuss a broad range of issues that are critical to the China-U.S. economic relationship.

    "My meeting tomorrow is to do some planning in terms of the work we need to accomplish between now and December," Paulson said. "WuYi and I will have talks to exchange and discuss where we move forward."

    Citing the purpose of the SED as "strategic" and "looking to the future", Paulson said he would also discuss some "sensitive, short-term" issues including food safety.

    Paulson's visit came days after the Senate Finance Committee raised a bill on currency exchange rates, which would impose sanctions on China for unfair trade policies if it is approved by the Congress.

    "Treasury cannot support or recommend this approach, and continues to believe that direct, robust discussions with senior Chinese leaders, not legislation, is the best means of achieving progress," Paulson said