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Last Updated: Wednesday, 19 April 2006, 05:36 GMT 06:36 UK
Chinese president begins US tour
President Hu Jintao with Microsoft founder Bill Gates
Hu Jintao is spending two days in Washington state
Chinese President Hu Jintao has met Microsoft founder Bill Gates at the start of a four-day visit to the US.

Mr Hu arrived in Seattle on Tuesday for a tour of Washington state before talks on Thursday with the US president.

His high-profile tour comes as anger grows in the US about the size of its trade deficit with China.

Mr Hu will also visit Boeing's offices - both Microsoft and Boeing have recently signed large commercial agreements with Chinese counterparts.

Mr Hu told the governor of Washington state, Chris Gregoire, that he had chosen to visit Seattle because the state had "very good cooperative relations" with China.

He said the tour of the Microsoft campus "left a strong impression" on him and he praised the company for its innovation.

He emphasised China's commitment to action against software piracy.

China seems to be saying the right things
Robert Zoellick, US Deputy Secretary of State

"China is focused on and has already accomplished much in creating and enforcing laws to protect intellectual property," he said.

He had dinner with Mr Gates at his home on Tuesday evening.

Currency pressure

The issue of trade relations between the US and China is expected to dominate the visit.

Washington has blamed China for its spiralling trade deficit - which rose to a record $202bn last year.

It says Beijing has deliberately suppressed the value of its currency, making its exports more competitive in global markets.

SINO-US TRADE FACTS
Chinese textile factory
The US had a $202bn trade deficit with China in 2005
The US is China's second largest trade partner while the China is the US' fourth largest market

Many US politicians want strong action unless China revalues the yuan.

Last year, Washington slapped import curbs on Chinese textile imports.

A vocal group of US Senators has threatened penalties on a wider range of goods unless China lets the yuan trade more freely against the dollar.

Beijing - which raised the yuan's value against the dollar by 2% last year - has denied claims of currency manipulation.

It says US firms should focus more on developing products suitable for the Chinese market.

The two countries recently signed $4bn in bilateral trade deals and hope to foster greater co-operation in key industrial sectors such as energy, transport and software.

'Slow' progress

US Deputy Secretary of State Robert Zoellick said the two sides had made progress on narrowing their trade differences but progress was far slower than he would like.

"China seems to be saying the right things," Mr Zoellick - a former US Trade Representative - said ahead of Mr Hu's visit. "But the process of change seems agonisingly slow."

Chinese officials said economic and commercial co-operation was crucial to building "sustainable and healthy" relations between the two nations.

However, a Chinese foreign policy expert said the US was principally to blame for the uneven trading status between the two.

"The fact that the US has consistently allowed its domestic politics and its ideological prejudice against China... to supersede fairness is what prevents a speedy solution to the trade frictions," said Yuan Peng, from the China Institute of Contemporary International Relations.

Despite growing tensions, Sino-US trade has grown by an average of 27% a year over the past four years.




BBC NEWS: VIDEO AND AUDIO
Watch President Hu meet Bill Gates



SEE ALSO:
Q&A: Hu Jintao's visit to the US
17 Apr 06 |  Asia-Pacific
US trade deficit with China falls
12 Apr 06 |  Business
China to tackle software piracy
12 Apr 06 |  Technology
US trade deficit soars to record
14 Mar 06 |  Business
China 'may cut US debt holdings'
04 Apr 06 |  Business
US senators press China on yuan
21 Mar 06 |  Business


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