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U.S. Treasury Secretary Henry Paulson on Tuesday hailed U.S.-China strategic Economic Dialogue (SED) as helpful for bilateral economic relationship to survive the hard times.

"The SED allowed us to build a strong relationship, which has been useful in keeping our economic relationship on an even keel even during the times of tension," Paulson told Xinhua in an exclusive interview Tuesday evening immediately after his closed-door talk with Chinese Vice Premier Wu Yi.

Paulson said he and Wu had a "very constructive" discussion.

Paulson's remarks came in response to some U.S. legislators' criticism that the ten-month-old bilateral dialogue has not delivered enough tangible results.

Calling the dialogue "responsible for managing the economic relations between the two sides, " Paulson said he was dealing with "the most sensitive and difficult issues in order to maintain confidence of both sides."

Launched in September 2006, the biannual economic strategic dialogue between Beijing and Washington serves as a platform to discuss long-term, strategic and comprehensive issues in the bilateral trade relationship.

Paulson said he is "very confident" the SED is a success, as" some progress would not have been achieved without the SED."

Paulson and Wu discussed how to pave way for the third SED, to be held in Beijing in December.

"Both sides agreed the SED is important and that we need to work and achieve positive outcomes for both countries." said the treasury secretary.

He said they will have "an ambitious work schedule", focusing on "a smaller number of" but "the most important issues". Yet he did not release the details of the work schedule or specify the important issues.

Paulson told Xinhua he and Wu also talked about areas such as environment and energy efficiency, consumer food safety, product safety, investment and balanced growth.

"When we talked about the balanced growth, I emphasized for greater currency flexibility," he said.

Just days before Paulson's China trip, the Senate Financial Committee overwhelmingly passed a bill that allowed the U.S. government to use a wide array of measures to force other countries to adopt more market-oriented currency policies.

The bill will require the Treasury Department to identify countries with "fundamentally misaligned" currencies.

Earlier, the Treasury refused to cite China as a currency manipulator in its semiannual report to the Congress. "I will not say anything other than the Treasury's view that legislation is not the proper way to proceed and deal with the currency issue," Paulson told Xinhua.

"I believe it is much more productive to have bilateral talks and engagement," Paulson said.

On food safety, Paulson said American consumers have very high expectations when it comes to product safety and food safety and he knows it is also a very important issue for Chinese consumers.

"We agreed in today's global market place it is important for both countries to work together for the mutual benefit of our citizens and make progress in these areas," he said.

Paulson said he looks forward to speaking with Chinese President Hu Jintao Wednesday afternoon. "I will give him an update on the political and economic situation in the United States, talk about the importance of SED and the importance of achieving some positive outcomes for both countries."

He traveled to China on Sunday with the first stop in northwest China's Qinghai Province.

Paulson said he knew Qinghai is China's "Water Tower" and source of the country's major rivers. "I am very pleased to see what the Chinese government is doing to protect and restore this very special area."

This is Paulson's second China visit this year, following his brief tour in March.

Paulson met or will meet with heads of China's top economic planning body, central bank, forestry department, regulatory commissions of banking and securities before he ends the tour Wednesday evening.