The upcoming strategic economic dialogue with the United States can help iron out wrinkles in the relationship, but China has no plan to change the pace of its exchange rate reform despite pressure from Washington, government officials said yesterday.

"We hope both sides can resolve problems through frank dialogue and with a reasonable attitude to help promote healthy and steady growth of economic relations," Foreign Ministry spokeswoman Jiang Yu told a regular news briefing.

Jiang's remarks came as Vice-Premier Wu Yi - as special envoy of President Hu Jintao - leads a delegation of high-ranking officials from the ministries of commerce and finance and the National Development and Reform Commission to the second round of the China-US Strategic Economic Dialogue in Washington on May 22-23.

Wu will co-chair the latest round of the dialogue with US Treasury Secretary Henry Paulson.

The two countries will discuss issues concerning the service industry, investment and policy transparency, energy and the environment as well as balanced growth and innovation, Jiang said.

There is bound to be some friction between China and the US amid rapidly growing economic ties, but "we believe the main thrust of our economic relations is mutually beneficial", Jiang noted.

Asked about the US pressing China to let its currency appreciate, Jiang said China will continue its exchange rate reform in an "active, controllable and gradual" way.

US Congress members who have threatened punitive trade action unless the yuan appreciates more quickly should "know and understand China's policies", Jiang said, implying some lawmakers are ignoring efforts China has made on the issue.

The yuan has risen 5.68 percent since Beijing dropped its peg to the US dollar in July 2005, switching to a mechanism that sets the exchange rate on a basket of currencies. It closed at 7.6948 to the greenback yesterday.

Senior Finance Ministry officials yesterday also appealed to the US to keep in mind the mutual benefits of fast-growing trade and investment.

Speaking to foreign journalists in Beijing, a senior official from the Ministry of Finance, who asked not to be named, said that despite the US urging faster moves on freeing its exchange rate, Beijing believes that it cannot do so without possibly damaging its economy.

"What we need to explain is that external voices will only backfire ... they will only disrupt the normal reform of China's exchange rate regime," the official was quoted by the Associated Press as saying.

"We are firmly against any threatening rhetoric or steps to politicize economic issues," he said.

(China Daily 05/16/2007 page1)