Former US Treasury secretary Henry Paulson expressed doubt Tuesday that election year criticism of China would hurt ties but said the world's two largest economies need to improve relations.

President Barack Obama has boasted on the campaign trail of confronting China over US jobs, while his Republican challenger Mitt Romney has lashed out at Beijing and accused Obama of being a "supplicant" to the communist giant.

Paulson, who served under Republican president George W. Bush, said heated words were nothing new in election campaigns, telling a Washington audience: "I think the important thing is to look through the rhetoric."

"I don't believe that either candidate wants to make China a focus of the campaign because I think they know that we need to cooperate with China on a whole range of areas," Paulson said at the Atlantic Council.

"I think you've got nationalism in both countries. Nationalism plays."

But he added: "When you look at both President Obama and Mitt Romney and the position they've taken, they have argued for a level playing field and a competition according to the global trade rules... and made very clear that they want to do that without having a trade war."

Paulson said the United States and China had mechanisms such as the World Trade Organization to prevent disputes from spiraling into greater tensions.

But Paulson said that a broader consensus in the United States on ties with China had broken down, with a growing number of business and opinion leaders questioning whether the relationship benefited both sides.

The former chairman and CEO of Wall Street titan Goldman Sachs said that China and the United States were increasingly interdependent and that US policymakers should see an interest in a healthy Chinese economy.

"Bluntly put, the United States will suffer if China fails to get ahead of its growing list of economic challenges, which are now threatening to interrupt its remarkable record of success in recent decades," he wrote in a paper released by the Atlantic Council policy institute.

Paulson recommended steps to improve relations, including for the United States and China to show openness to investment from the other nation.

"Many Americans react negatively to foreign direct investment, even though it is the ultimate voice of confidence in our system," Paulson wrote.

The former Treasury secretary also called for the United States to modernize its controls on sensitive exports and for China to enforce intellectual property rights.

A number of US lawmakers accuse China of unfair trading practices, saying that Beijing undervalues its currency and gives unfair advantages to its companies to flood the world with inexpensive exports.

Paulson said he recently visited China and saw first-hand that the Asian giant -- long seen as a driver of the global economy -- was losing steam.

"There is no doubt that the economy has slowed down significantly and in a number of areas has really slowed down," Paulson said.

But Paulson voiced confidence that China would respond to monetary policy tools, saying its problems stemmed from measures it implemented to combat inflation and a feared housing bubble, along with Europe's woes.

"My best judgment is that we're not going to see a hard landing," he said.