Next round of US-China dialogue critical: Group

Beijing, Feb 6: China and the United States need to make sure that the next round of their ''strategic economic dialogue'' shows signs of tangible progress if the forum is to retain its relevance, a US business group said today.

The two sides held the first round of such meetings -- aimed at allowing them to discuss long-term issues of mutual importance -- in Beijing in December. The next is set for May in Washington.

Myron Brilliant, vice president of the U.S. Chamber of Commerce, said that with U.S. presidential elections approaching and some members of Congress eager to take on the issue of China trade, the timing of the May meeting would be critical.

''There is pressure to make sure that the dialogue is moving forward and is not just a talk shop. And if it transpires in Washington that not much comes out of it, then it could fade in significance,'' Brilliant told reporters.

A number of senators have called for short-term results on issues such as the value of the yuan , which many U.S.

critics say is significantly undervalued, giving Chinese firms an unfair advantage in global markets.

Speaking days after the U.S. Trade Representative lodged a complaint with the World Trade Organisation over Chinese government subsidies for a number of industries, Brilliant said that China was likely to respond in a reasonable way, as the United States had already consulted it on the issue.

''The reaction from the Chinese side might be more restrained than you would expect on this particular issue,'' he said. ''I don't think this is viewed as out of the ordinary.'' Brilliant said China could show progress on the currency issue by widening the daily trading band of 0.3 percent against the dollar up or down from a mid-point set each morning.

He also urged China to let foreign financial services firms play a greater role in the development of its bond market.

Reuters=cfxs>