Bush presses China on currency; lawmaker warns of possible action

President Bush said he told a senior Chinese economic minister Thursday that the U.S. was “watching very carefully” whether Beijing would strengthen the value of its currency.

After a meeting with Vice Premier Wu Yi, leader of the largest high-level Chinese delegation ever to visit the United States, Bush told reporters the U.S. was “making it clear to China that we value our relationship, but the $233-billion trade deficit must be addressed.”

Strengthening China’s currency, he said, is one way to deal with the deficit.

“This is a complex relationship,” Bush said. “There’s areas where there’s friction, and we’ve just got to work through the friction.”

Economic talks Wednesday between Wu’s delegation and senior Bush administration officials failed to reach a breakthrough in the countries’ biggest dispute: China’s undervalued currency.

Wu met Wednesday and Thursday with frustrated congressional leaders, many of whom are considering legislation that would punish Beijing for trade practices that they say drove the trade deficits to record levels and cost the U.S. thousands of manufacturing jobs.

After talks Thursday with Wu, Senate Majority Leader Harry Reid (D-Nev.) warned that “if China and the Bush administration won’t take action to bring about more balance, there is growing sentiment in Congress to act.”

Sen. Debbie Stabenow (D-Mich.) said after another private meeting Thursday, “We spent a lot of time on currency manipulation, and they spent a lot of time trying to convince us that things are getting better.”

Stabenow said that at one point one of Wu’s ministers urged the U.S. side to be patient. “I said, ‘People in Michigan are losing their jobs because of the violation of the trade laws, and it’s very difficult to be patient when you’re losing your job,’ ” she said.

Zhu Guangyao, assistant Chinese finance minister, told reporters that Wu stressed in her talks with Congress that it would be “inappropriate to use noneconomic means” to solve differences, referring to retaliatory legislation.

Bush, in his comments, urged China to open financial markets to U.S. companies and to allow U.S. beef imports. “They need to be eating U.S. beef. It’s good for them. They’ll like it,” he said.