"We have learned that engagement works, that engagement can help achieve meaningful, tangible results that would not have been possible otherwise," Paulson told a Washington forum ahead of the fifth SED in Beijing this week.

"Engagement has helped us manage the current financial market crisis," Paulson said, noting the crisis is a global event, and governments around the world have engaged directly and responded with actions to restore stability and address market developments.

"In this regard, we appreciate the responsible role China has played during the turmoil," he said. "We have welcomed China's active participation, along with other members of the G-20, in the Summit on Financial Markets and the World Economy, and in multilateral mechanisms for cooperation including the G-20, APEC, and the International Financial Institutions."

He said that China will continue to play a key role in the world economy, and China's growth is an opportunity for US companies and consumers, for U.S. producers, exporters and investors.

"A stable, prosperous and peaceful China is in the best interest of the Chinese people, the American people and the rest of the world," said the Treasury chief.

He stressed the SED "has improved the relationship between our two countries so that we can effectively manage complex issues, such as the recent global financial turmoil."

"We have stood many tests so far, and I believe we can withstand many more if we continue to engage with China as it is, not as we would imagine it to be," he added.