http://192.168.2.6/english/中国采购---贸易火爆.rm

Surely it's all smiles and handshakes now, but just wait until they sit down and talk when Wu Yi, Vice Premier, the most senior woman in China's Communist Party is likely to tell the US to back off, especially when it comes to China's currency, the YUAN. The US argues the YUAN is grossly undervalued by as much as 40%, making Chinese goods artificially cheaper.

We see companies going out of business. In the United States we see companies moving to other countries like India and China in order to be able to compete.

Cheap exports are fueling China's massive trade surplus, 63 billion dollars so far this year, much of that coming from the United States which means China is well on its way to a breaking last year's record-busting trade surplus with the US. And now some lawmakers in Washington are threatening to impose tariffs on Chinese goods if Beijing doesn't revalue its currency. In response, the head of the Chinese delegation Wu Yi has warned such irresponsible acts can only obstruct economic globalization and hinder the fundamental interests of both China and the US. In the weeks before these talks, China went on a very public buying spree across the United States, signing deals worth billions of dollars, and Beijing also slightly relaxed currency controls, allowing the value of the YUAN to move up or down a little more in any one day.

Um, they don't like to appear to do things under direct pressure, so by doing things beforehand and close beforehand, they can show that they are in fact clearly tied to the talks.

The US Treasury Secretary interviewed here by a local media has warned if there is no progress during these meetings, there's every chance the talking will stop and then the US Congress will act.” All the more likely, he added, with a looming presidential election.

John Vause CNN Beijing.