China sees worries in US trade ties -paper

BEIJING, Dec 20 (Reuters) Days after China and the United States held talks to narrow rifts, an official Chinese newspaper said the two nations have yet to find a way to resolve deepening trade disputes, and it accused Washington of ''meddling'' in Beijing's policies.

US Treasury Secretary Henry Paulson's ''strategic dialogue'' with China last week underscored increasingly mature ties between the two countries, according to a commentary in the overseas edition of the People's Daily today.

But the ruling Communist Party's paper also warned of potential problems that could threaten cooperation.

''Behind the steadiness of China-US ties also lie many hidden worries,'' wrote Yuan Peng, a senior researcher in a government think-tank.

''The greatest cause of anxiety is the increasingly intense problems in trade and economics between the two countries, and we have yet to find an effective way of resolving them.'' The commentary in the politically prominent paper suggests that despite Paulson's bridge-building visit and the US Treasury Department's decision on Tuesday not to label China a currency manipulator, Beijing remains wary of the United States' intentions and fears that trade disputes may flare.

''At present, the United States is intensifying meddling at all levels in China's financial opening, economic growth and other deep-seated, systemic issues, and this is rattling the smooth development of trade and economic ties,'' the paper said.

During their visit, Paulson and other senior US officials urged China to speed the rise in the value of its yuan currency to help stem a surge of Chinese exports.

The US trade deficit with China could reach a record 240 billion dollars this year, fuelling the belief in Congress that Beijing is deliberately undervaluing its currency by 15 to 40 per cent to give Chinese exporters an advantage in world trade.

The newly-elected, Democrat-dominated Congress may pressure the Bush administration to challenge China on these complaints, ''bringing new uncertainties to China-US relations,'' the commentary said.

It also warned of Washington's complaints about Chinese energy ties with Sudan, Venezuela and other countries criticised by the Bush administration as non-democratic or violators of human rights. These ''third-party factors are forming into a new set of frictions,'' it said.

REUTERS PB DS1135