Two days of high-level economic talks between the US and China have opened in Beijing, with criticism on both sides.
Mr Paulson and Ms Wu both made critical opening remarks
Chinese Vice-Premier Wu Yi said in her opening remarks that the US was failing to fully understand China.
US Treasury Secretary Henry Paulson accused China of holding down the value of its currency to boost exports, and urged "tangible results" in the talks.
Last year the US had a record trade deficit with China, of more than $200bn (£101bn).
Mr Paulson acknowledged "scepticism" in the US that the talks would produce substantive progress.
"Therefore, it is incumbent upon us, not only to have frank and energetic discussions, but also to produce tangible results on the most important issues facing our two nations," he said.
But Ms Wu hit back, accusing the US of a lack of understanding.
"We have had the genuine feeling that some American friends are not only having limited knowledge of, but harbouring much misunderstanding about the reality in China," she said.
"This is not conducive to the sound development of our bilateral relations," she added.
She said she hoped that the talks would enhance mutual trust and remove misgivings between the two sides.
The summit, which is being billed as a "strategic economic dialogue", follows a range of commercial deals signed between the US and China.
Key topics include currencies, access to markets and information piracy.
This week marks five years since China joined the World Trade Organization, but the US feels that China still has much to do to open its markets as required.
The delegation in Beijing includes the Federal Reserve's head Ben Bernanke and US Trade Representative Susan Schwab.
The visit comes days after the US issued a report assessing China's record in implementing requirements demanded by the WTO.
"China has taken many important steps to implement its WTO obligations, but on the fifth anniversary of its WTO membership, China's overall record is decidedly mixed," said Susan Schwab following the report.
Ms Schwab also said some industries faced "frustrating barriers" when doing business in China, and highlighted concerns that China's market liberalisation had been slowing down in the past year.
But analysts also say China has transformed into a far more sophisticated nation in the past five years - and that Mr Paulson and his mission will face a country that is more assertive in trade matters.
The trip comes amid mounting pressure for China to reform its currency, and a day after data showed that China has replaced Mexico as the second largest trading partner with the US.
The US - the world's largest economy - posted figures showing its deficit with China had risen by 6.1% in October compared with the previous month.
Critics blame the growing deficit with China largely on China's currency, the yuan, being artificially weak.
This makes Chinese exports to the US cheap in comparison with US goods.