Beijing - US Treasury Secretary Henry Paulson met Chinese leaders on Tuesday for talks that he said would focus on the environment and economic issues including China's currency. Paulson began a "strategic economic dialogue" with Vice Premier Wu Yi and was scheduled to meet President Hu Jintao later on Tuesday.
Before his trip, Paulson said he would focus on the growing US trade gap with China and on China's currency policy and economic reforms.
His visit comes amid tensions between China and the United States and Europe over the huge Chinese trade surplus.
Beijing's critics charge that the low value of the yuan is a major contributing factor to the imbalance in trade by making Chinese exports cheaper and imports of foreign goods in China more expensive.
China last year chalked up a trade surplus of 177 billion dollars, a whopping 74 per cent increase above the 2005 figure.
Paulson began his China trip with a visit to the remote Qinghai Lake on Monday, saying in a treasury department statement that the lake provided "an example of the environmental challenges faced in China as well as the global nature of these problems."
In remarks before their private talks on Tuesday, Wu said Paulson's visit to Qinghai would help him to "attain a more complete picture of my country."
She said the poverty of sparsely populated Qinghai province, compared with the affluence of Beijing and other major cities, showed that China could not pose any threat to other nations.
"China's very goal in its development is so that its 1.3 billion people can eat their fill, dress warmly and live well," Wu said.
"Who could we threaten? We don't have the ability," she said.
