China taking a tough line in talks

BEIJING - China showed its growing assertiveness Monday as it launched high-level talks with Washington, saying it will carry out currency reform at its own pace and calling for an end to U.S. curbs on high-tech exports.

Beijing also called on Washington to simplify foreign investment rules that it says are hampering Chinese companies, and it defended a policy to promote domestic technology that its trading partners say might hurt foreign companies.

At an opening ceremony for the strategic talks, President Hu Jintao promised changes in exchange rate controls that Washington and others say keep China's yuan undervalued and distort trade. But he gave no indication when it might happen - and, in fact, said changes would be gradual and be based on "the principle of independent decision-making."

U.S. Secretary of State Hillary Rodham Clinton and Treasury Secretary Timothy Geithner sat onstage behind him.

U.S. and Chinese officials stressed their wide-ranging common interests and pledged closer cooperation on trade, financial regulation, climate, and piracy. They called for more student exchanges and other efforts to promote "people to people" ties.

The gathering is the second round of strategic talks, termed the Strategic and Economic Dialogue, that began last year in Washington.

Monday's meetings focused on economic strategies and included discussion of the European debt crisis, officials said.

In currency, Beijing faces demands by some American lawmakers for trade sanctions if it fails to act. President Obama vowed in February to get tough on currency but has been more conciliatory lately, possibly hoping Chinese leaders would act if they do not appear to be giving in to pressure.

The yuan has been frozen against the dollar since late 2008 to help China's exporters compete abroad. Analysts expected Beijing to let the currency rise this year to ease strains in its fast-growing economy but say that might have been postponed due to the European debt crisis.