Bush to push China on trade, Iran

WASHINGTON, Apr 18 (Reuters) President George W Bush will urge Chinese President Hu Jintao on Thursday to do more to cut his country's swelling trade surplus with the United States and join efforts to isolate Iran because of its nuclear program, U.S.

officials said.

Bush and Hu meet at the White House at a time when many Americans see China emerging as the next great competitor to the United States, an Asian giant with a growing demand for oil that floods American markets with cheap goods.

In international affairs. US officials would like to see Beijing's Communist leadership exerting real pressure on Iran and North Korea, as those nations pursue nuclear weapons.

Washington has long-standing concerns about Chinese human rights practices which it says do not befit a world power. The Bush administration also believes China should alter a foreign policy whose top priority is securing oil supplies, even when that means supporting states like Sudan which may violate human rights or spread instability.

However, trade remains Bush's number one concern, highlighted by China's trade surplus with the United States, which tripled last year to 202 billion dollar.

Faryar Shirzad, a top international economics official in the White House National Security Council, said Bush would press Hu to take new steps to open markets.

Specifically, he will urge Hu to move to a flexible, market-based currency, and enforce intellectual property rights to combat the illegal pirating of American computer software.

US manufacturers hope Hu will announce that China is prepared to move more quickly to a fully flexible exchange rate. They contend China's yuan is undervalued by 15 to 40 percent, giving Chinese exporters an advantage while penalizing US producers trying to sell in China.

STATEMENT UNLIKELY A senior Bush administration official doubted such an announcement would be made around the meeting.

''I don't anticipate any one-off changes occurring at the meeting, but it's an issue that is a priority for us,'' the official told reporters at a White House briefing yesterday.

Beijing tried to pave the way for a smooth visit by sending a trade delegation that piled up purchases worth 15 billion dollar on a cross-country spending spree.

That did not quieten Democrats who blame Bush for the trade deficit. On issue after issue, said Senate Minority Leader Harry Reid of Nevada in a letter to Bush, ''your administration's lack of real action has conveyed to Chinese leaders that rhetoric is more important than substance.

''Despite occasional tough words and saber-rattling, your administration has stood by as China dictated the course of our trade and economic relationship. It is time for a new policy direction,'' Reid wrote.

On Iran's nuclear ambitions, a senior Bush administration official said Bush hoped China would join ''in a step-by-step approach'' to contain Tehran's atomic program but noted China has historically been reluctant to approve U.N. sanctions.

However in light of bellicose statements from Iranian President Mahmoud Ahmadinejad, the official said, ''I think the Chinese have come around to a point of realizing that we need to stand firm on the issue of the Iranian nuclear program, so we hope for their support.'' Hu will be treated to full military honors and a 21-gun salute on his arrival. Instead of the customary state dinner, there will be a formal luncheon with 200 guests.

In a break with normal White House practice there will be no joint news conference after the two leaders meet.

''They're not as comfortable as we are with press events,'' said a senior official.

REUTERS PDS PM0439