U.S., China build cases as talks near

China has gone on an American shopping spree to ease trade tensions with the United States, but it’s not about to engineer a major revaluation of its currency in response to foreign critics, senior Chinese officials said Tuesday.

Meeting with foreign journalists ahead of next week’s Sino-U.S. Strategic Economic Dialogue meeting, a senior Finance Ministry official said: “I want to stress that external interference will only backfire. We are firmly against any attempt to make threatening rhetoric.”

He and the other Chinese officials spoke on the condition that they not be named.

China’s currency, the yuan, trades within a narrow range set by its leaders. U.S. officials say it is undervalued, making Chinese goods cheap for Americans and U.S. items pricey in China.

Mark Sobel, deputy assistant Treasury secretary, said last week that the U.S. was “totally frustrated with the pace of reform in China. We’re not satisfied at all with the movement, the upward movement in the” yuan.

The value of the yuan has risen by just 1.5% against the dollar since the start of the year, and in 2006 the U.S. posted a record trade deficit with China.

That’s prompted at least a dozen pieces of legislation on China in Congress this year.

“I left the Dirksen Senate Office Building convinced that trade sanctions against China are now inevitable,” Stephen Roach, chief economist at Morgan Stanley, wrote in a report after testifying at a Senate hearing recently. “After years of talk and bluster, protectionism no longer seems like an empty threat.”

U.S. politicians also are targeting China on other fronts. This month, 100 members of Congress sent a letter to Chinese President Hu Jintao criticizing Beijing’s failure to do more to stem bloodshed in Sudan’s Darfur region. China is Sudan’s largest foreign investor. And last month, the Bush administration referred China to the World Trade Organization over an intellectual property rights issue and a market access case.

Next Tuesday and Wednesday’s U.S.-China meeting in Washington follows December’s opening round, when nine U.S. Cabinet secretaries traveled to Beijing. The meetings, co-chaired by Treasury Secretary Henry M. Paulson Jr. and Chinese Vice Premier Wu Yi, will touch not only on trade, economic imbalances and more open markets but also on energy and the environment.

Chinese officials said Tuesday that economic and trade relations between the nations would be better if Congress and the U.S. media took a more constructive approach.

The senior Finance Ministry official said many members of Congress have an overly narrow perspective based on protecting a few hundred workers. And a significant percentage of House members have never traveled overseas, he claimed.

“How can they understand what’s going on in China? We cannot understand how the political mechanism of the United States works,” the official said.

The Chinese called on U.S. officials to ease restrictions on exporting high-tech goods to China; bolster America’s low savings rate; and treat China as a market rather than a state-directed economy for the purpose of agreements.

China had a $232-billion trade surplus with the U.S. in 2006, a figure that is on track to rise 20% this year. China, which uses a different methodology, pegs its surplus at $144 billion.

In a bid to improve the atmospherics ahead of the meeting, a delegation of 200 Chinese business executives signed $4.3 billion worth of deals in San Francisco last week before heading to Atlanta, Chicago and Washington. The final package is expected to top $16 billion.

Members of American business chambers in China also are concerned about rising protectionism. During a visit to Washington this month, more than two dozen representatives of U.S. business interests in China urged lawmakers and the Bush administration to boost tourism, ease export controls and bolster sales to China by small and medium-size companies.

Mei Renyi, director of the American Studies Center at Beijing Foreign Studies University, said China needed to do more to address the anger and concerns of U.S. citizens over lost jobs. Still, he was optimistic that both governments could prevent a full-fledged trade war.

mark.magnier@latimes.com

Times staff writer Don Lee in Shanghai contributed to this report.