Several lawmakers want to proceed with legislation imposing stiff penalties on Chinese imports after lengthy meetings on Capitol Hill on Wednesday and Thursday with Wu on the currency issue.

Wu "stressed that it is important for the two sides to use sincere dialogue to solve (issues) gradually and it is inappropriate to use non-economic means to seek a solution or willful resort to pressure," Chinese Assistant Finance Minister Zhu Guangyao told reporters.

Zhu said that China was already "very dissatisfied" with recent US actions to haul Beijing to the World Trade Organization for copyright piracy and Chinese barriers to US music, films and books even though the issues could have been resolved bilaterally.

"And we hope that the US side will know the position of the Chinese side, and redressing similar issues in the future will follow the principles of reciprocity and equal consultations," he said.

Zhu also indicated that any US sanctions triggered by legislation in Congress over the currency issue could jeopardize relations between the two powers.

"We hope they will have a correct understanding of the importance and significance of the economic and trade relations between the two countries and bear the overall state interest of the United States and view the issue of legislation from this perspective," he said.

Zhu had accompanied Wu and 15 other Chinese ministers to high level talks this week with the United States on key economic issues eclipsed by American concerns over a burgeoning trade deficit blamed on an undervalued Chinese currency.

The Chinese team met with US President George W. Bush at the White House Thursday.

Bush said after the talks that Washington was "watching closely" whether Beijing would allow the appreciation of the Chinese currency to help address the burgeoning US trade deficit with the Asian giant.

The Bush administration is under pressure from US lawmakers threatening to push ahead with legislation imposing punitive tariffs on Beijing if the Chinese refuse to allow an appreciation of the yuan.

They accuse China of keeping its currency grossly undervalued to make its exports to the United States cheaper -- a key factor cited for the snowballing US trade deficit with the Asian giant that hit 232.5 billion dollars last year.