Crisis overshadows US-China talks

By Michael Bristow
BBC News, Beijing

Wang Qishan (l) said the economic crisis was the most pressing issue

Senior United States officials are in China for economic talks, an event that is being overshadowed by the global financial crisis.

China has already said the two-day meeting's most pressing task is to help sort out the financial mess.

The US is also pushing to resolve a dispute about the value of the Chinese currency, the yuan.

The two sides are meeting under the China-US Strategic Economic Dialogue framework, set up two years ago.

This is the fifth meeting within the framework, designed to iron out economic questions between the US and China.

But in his opening remarks, Chinese Vice-Premier Wang Qishan, leading the talks for China, said bigger issues were at stake.

"Making joint efforts to tackle the current global economic crisis is the most urgent task before us," he said.

'Currency reform'

The US is keen to talk about the yuan, which it believes is under-valued. It says this gives Chinese exports and unfair advantage.

Some US lawmakers want the government to punish China if it does not allow the yuan to appreciate at a faster rate.

US officials have been pressing China on this issue for several years.

And it was raised again when the two sides met at the Diaoyutai State Guesthouse, a government compound in western Beijing.

One US official at the talks, who did not want to be identified, said China had promised to continue re-valuing the yuan.

He said: "We are continuing to reinforce the benefits of currency reform and, encouragingly, the Chinese continue to recognise that it's in the country's interests."

But China might decide to the time is not right to make any concessions on this issue.

That is partly because this current team of US officials - led by Treasury Secretary Henry Paulson - is on the way out.

A new economic team will take over in the US next month, when the new president is sworn in.

Barack Obama has yet to say whether he will continue talking to China using this current format.