Paulson, Chinese officials meet amid trade, currency tensions

U.S. Treasury Secretary Henry Paulson met with Chinese officials on Tuesday for talks on trade, currency and other disputes amid pressure from American critics for Beijing to take faster action over its swollen trade surplus.

Paulson had lunch with China's central bank governor, Zhou Xiaochuan, and other bank officials. No details of their meeting were released. The secretary was due to meet later with Vice Premier Wu Yi, his counterpart in a high-level U.S.-Chinese "strategic economic dialogue."

Paulson is under pressure from U.S. critics of Beijing's trade record who say the long-running series of meetings is taking too long to produce results.

American lawmakers have proposed measures to punish Beijing for controls on its currency, the yuan. Critics say China keeps the yuan undervalued, giving its exporters an unfair price advantage and adding to its growing trade surplus.

Analysts say Paulson is hoping to return to Washington with a report on Chinese intentions that might persuade Congress to postpone taking drastic action against Beijing.

The last formal meeting of the dialogue in May ended with several minor agreements but no progress on currency.

On Monday, Paulson began his trip to China with a stop at Qinghai Lake in the country's far west to highlight the environmental costs of its 28-year-old economic boom.

China revalued the yuan by 2.1 percent against the U.S. dollar in July 2005 and has allowed it to rise by about 7.2 percent since then.

The rate of increase has speeded up in recent months, but analysts expect Beijing to restrain the yuan's rise to about 5 percent annually over the next few years - far less than critics want.