CHINA SAYS it is sending an envoy to Washington to try to ease trade frictions as its currency regime comes under fire, warning that threats from US legislators could stifle room for progress.

The announcement yesterday, along with conciliatory comments by China’s commerce ministry, appeared aimed at cooling an increasingly rancorous dispute which has US senators threatening to slap duties on Chinese products if Beijing does not allow the yuan to rise.

“Channels of communication between our two sides are open,” He Ning, head of the commerce ministry’s North American division, told a media briefing.

“All issues of concern to either side can be discussed through these channels.”

However China gave no indication that it was ready to abandon its commitment to a stable yuan exchange rate, and market expectations of appreciation remained muted.

He and other officials at the briefing stressed that the United States remained a key market for Chinese goods and Beijing wants to douse risks of a backlash.

“Sending an official to Washington sends a signal that China wants to talk through these issues and doesn’t want to escalate this conflict,” said Wang Yong, a professor at Peking University who studies China-US economic ties.

Fruitful discussion was possible only if Washington checked politics and emotions at the door, said Prof He.

“This will make the whole situation more complex, imposing disturbance from outside on our normal channels of communication.”

Political pressure is certainly building.

Many in Congress are demanding tough action if China resists appreciation.

The US treasury will next month issue a key currency report and contention over policy towards China could be magnified by mid-term congressional elections in November.

China said Zhong Shan, a vice-commerce minister, will visit the United States from March 24th to 26th for discussions focused on the “Sino-US trade balance and trade frictions”. – (Bloomberg)