No China-U.S. currency deal

The United States and China concluded high-level trade talks Wednesday with progress reported in a few areas but no breakthrough in the biggest dispute, China’s currency.

Treasury Secretary Henry M. Paulson Jr. and Chinese Vice Premier Wu Yi sounded positive notes on the importance of the new high-level discussions.

But the scant signs of success left China’s critics vowing to push ahead with legislation seeking to punish China for what are seen as unfair trading practices that have driven U.S. trade deficits to record levels and cost thousands of American manufacturing jobs.

Hoping to head off punitive legislation, Wu and other members of her team -- the largest high-level Chinese delegation ever to visit the U.S. -- met behind closed doors with congressional leaders after the talks with members of President Bush’s Cabinet had concluded.

Wu, speaking through an interpreter, said her discussions with House Speaker Nancy Pelosi (D-San Francisco), Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) and other House leaders Wednesday were “very good,” but she provided no details.

Rangel said the Chinese told the lawmakers that they needed more time to implement reforms such as overhauling their currency system. He said his committee planned to move forward with legislation. Some of the bills being considered would impose stiff penalties on Chinese imports for what critics say are unfair trade practices.

Paulson headed a U.S. team that included 18 Cabinet members and other top economic officials, Federal Reserve Chairman Ben S. Bernanke among them. Wu’s team included 17 top Chinese government officials.

They were participating in the second round of Strategic Economic Dialogue talks after an initial session that was held in December in Beijing. The talks will take place twice a year and are designed to address economic tensions between the countries in light of a U.S. trade deficit with China that hit an all-time high of $232.5 billion last year.

Agriculture Secretary Mike Johanns said the U.S. raised the issue of food safety, which has been highlighted by such incidents as the deaths of pets that had eaten pet food made with tainted wheat gluten imported from China, and more meetings were planned.

The two countries agreed to more than double the number of daily passenger flights between the nations by 2012, going from 10 to 23.

Cargo flights were also increased. However, the gains fell short of the openings the administration had hoped to achieve.

In the area of financial services, China agreed to a slight expansion in business opportunities for U.S. financial service companies but not the lifting of the caps on foreign ownership of banks, securities firms and insurance companies that U.S. firms had sought.

This was a setback for Paulson, former head of investment giant Goldman Sachs Group Inc., who personally lobbied Wu on this issue during a dinner at his home Monday night.

“For years, we have heard vague assurances of greater market access for American financial institutions, but they rarely seem to become reality from China,” said a disappointed Sen. Charles E. Schumer (D-N.Y.).

There was also agreement for closer cooperation in the area of increasing use of environmental technology but no announcement that China would cut its tariffs to increase sales of U.S. energy and environmental products in China. Such an announcement had been expected.

China also rejected U.S. requests that it accelerate the revaluing of its currency, the yuan, which American manufacturers contend is undervalued by as much as 40%, making Chinese products cheaper for Americans and American goods more expensive in China.