China seeks to avoid shouting matches with U.S.-UPDATE 2

Trade the News

Tuesday September 07, 2010 08:48:08 PM GMT

* Conciliatory Chinese comments to visiting U.S. officials

* Tone indicates China wants to limit friction

* China PLA officer says dialogue needed (Adds Chinese military officer comments, paragraphs 16-18)

By Chris Buckley

BEIJING, Sept 7 (Reuters) - China wants to quell tensions with the United States through quiet talk, not shouting matches, a top diplomat told White House advisers on Tuesday, aiming to pave the way for a visit by President Hu Jintao early next year.

Chinese officials made the conciliatory public comments in meetings with the U.S. National Economic Council Director, Larry Summers, and Deputy National Security Adviser Thomas Donilon. Both were in Beijing for talks.

Washington and Beijing are drawn together by economic and diplomatic interests, but this year has brought bouts of friction over Internet policy, Tibet, U.S. arms sales to Taiwan, China's currency and Chinese territorial claims in the disputed South China Sea.

U.S. officials have said Hu is likely to visit the United States early next year -- an important but tricky political trophy for a Chinese leader -- and Chinese State Councillor Dai Bingguo stressed hopes for an amicable atmosphere.

"Quiet and in-depth dialogue is better than loud haranguing," Dai told Summers and Donilon, in remarks made in the presence of reporters as the two sides sat down for talks.

"At present, in no other relationship between countries is it more important to enhance dialogue, strengthen mutual confidence and expand and develop cooperation than it is between China and the United States."

As a State Councillor, Dai advises leaders. His ranking in the ruling Communist Party makes him more powerful within the government than Foreign Minister Yang Jiechi.

Summers and Donilon also took an upbeat public tone.

Summers told Chinese Vice Premier Wang Qishan on Monday that President Barack Obama "has emphasised for us the importance he attaches to a very strong relationship between the United States and China and to President Hu's upcoming visit to the United States".

BID TO REDUCE FRICTION

The conciliatory comments from Chinese officials indicated that Beijing wants to keep friction in check, even if deep differences over economic issues and regional disputes remain.

"There is strong inter-dependence and complementarity between the Chinese and U.S. economies," Chinese Vice Premier Wang told Summers and Donilon on Monday, Chinese newspapers reported.

"China-U.S. relations are developing in a generally healthy way."

Neither side has said what issues are being discussed during the two days of talks. Summers's discussions with China's top central banker, Zhou Xiaochuan, and other policy-makers are likely to include currency and trade issues.

The United States complains that China keeps its yuan currency undervalued, giving its manufacturers an unfair advantage against imports and making Chinese exports cheaper.

China unofficially pegged the yuan to the dollar from mid-2008 to mid-2010, so the currency weakened against other trade partners as the value of the dollar slid.

China ended that de facto peg on June 19, but the yuan has since weakened by about 0.33 percent against the dollar, after appreciating as much as 0.91 percent on Aug. 9.

Chinese military officers have denounced Washington for selling arms to Taiwan, the self-ruled island claimed by Beijing, and for naval activities in seas near China.

In another sign that Beijing may be seeking to calm tensions, one of those military officers called for "avoiding friction and seeking bases for cooperation".

"Solving the bilateral conflicts between China and the United States can rely only on dialogue, and not confrontation," Major General Luo Yuan wrote in the Chinese magazine, Outlook Weekly.

"Dialogue is better than taking aim at each other," he wrote. (Reporting by Chris Buckley; Editing by Ken Wills and Ron Popeski)

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