A sound relationship between the United States and China can bring tangible benefits for the two countries and the whole world, former US Treasury Secretary Henry Paulson has said.

"US-China relations are our most important bilateral relationship because so many of the world's major challenges are going to be easier to solve if we work together, and much more difficult if we don't," Paulson told Xinhua in an exclusive interview on Thursday.

The two countries could focus their cooperation in driving global economic growth, fighting terrorism, and dealing with climate change, he said.

On Chinese President Xi Jinping's upcoming visit to the United States next week, he said it is important as US-China relations are "under increasing stress today," adding that both Xi and US President Barack Obama understand the importance of bilateral ties.

"So it's going to be very important that President Xi speaks to the American people about his vision for China and for US-China relations," Paulson said.

"It's going to be very important that the two presidents talk very frankly about the differences, but find common ground where they have so much common ground," Paulson noted.

As for economic relations, he said the two countries' 600-billion-US dollar annual trade volume and growing cross investment are fundamental to bilateral ties.

"They create jobs in both countries; they helped drive prosperity in both countries," he said, noting that the two economies will be harmed if the United States and China ignore their economic relations.

"I think there's a big opportunity to reinvigorate this relationship as important as it is. It can be even more important if we fully tapped its potential," he explained.

Paulson described US and Chinese multinational enterprises as a "ballast" for the two countries' trade and economic relations, saying businesses on both sides have called for overall development of bilateral ties.

"And on the US side multinationals are finding that their business in China is ... increasingly important to them so this (US-China relations) is very very important to them," he said.

During Xi's visit, the Chinese president is scheduled to attend a symposium of Chinese and US entrepreneurs in Seattle.

"I'm looking forward to co-hosting this meeting in Seattle with key businesses on both sides and President Xi, because this will give the businesses an opportunity to talk about the big opportunities they see in China and about some of the challenges, and give President Xi opportunity to talk about his reforms which they very much want to hear," Paulson said.

He said one of the economic issues on the agenda is a bilateral investment treaty.

"And for instance, the Paulson institute was able to very quickly get a hundred US businesses signing a letter to both of our presidents, urging them to tell their negotiators to really work hard and getting a high standard bilateral investment treaty done which would create big opportunities for Chinese companies investing in the US and US companies doing even more in China," he said.

On China's reforms, Paulson said he is supportive of reforms in China's 13th Five-Year Plan period (2016-2020) as outlined by Xi.

"And there's been some progress, clearly, in a number of areas, and I would cite doing away with bottle necks making it easier for the private sector companies to do business in China," said the former treasury secretary.