US Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton will travel to China for a "strategic and economic dialogue" on May 24-25, officials said.

It will be Geithner's second trip to China in as many months, as he continues efforts to persuade China to let the yuan strengthen against the dollar.

Beijing's critics say the Chinese currency is undervalued by as much as 40 percent, making its exports artificially competitive.

Geithner has eschewed boisterous demands from Congress for US sanctions against China for currency manipulation, preferring quiet diplomacy.

But as US unemployment festers and Congress heads to midterm elections later this year, he faces pressure for quick results.

Since Geithner announced the delay of a mid-April report that could have branded China a "manipulator" there has been little sign of a policy shift in Beijing.

Geithner's last visit to Beijing in early April netted no specific pledges from China or major breakthroughs.

A G20 ministers meeting in Washington last week did not address the issue explicitly in a final communique, although it called for "sustainable and balanced growth."

But pressure appears to be building on Beijing, and from within China's ruling class.

Brazil and India have joined the call for China to let the yuan rise.

The International Monetary Fund, which held its annual spring meetings over the weekend, said China must let its currency appreciate for its own financial well-being.

Forecasting two more years of red-hot expansion for the world's number-three economy, the institution said the Chinese yuan was "substantially" undervalued and was skewing world trade.

A yuan adjustment would help China tackle "excess demand pressures," the IMF said in an apparent reference to the threat of rising inflation, and give other emerging economies confidence to let their own currencies strengthen.

Clinton and Geithner are expected to hold talks with State Councilor Dai Bingguo and Vice Premier Wang Qishan, according to the Treasury Department.

earlier related report
Sarkozy pushes friendlier ties on China trip
Paris (AFP) April 26, 2010 - French President Nicolas Sarkozy sets off to China on Wednesday for a visit intended to set the seal on a reconciliation, two years after he offended Beijing with comments on Tibet.

The state visit, Sarkozy's second to China, will have a political rather than a commercial focus and will include talks on possible new sanctions on Iran over its nuclear programme, the French presidency said.

Sarkozy will be accompanied by his wife, Carla Bruni-Sarkozy, and will find time during the three-day visit for some private sightseeing in the ancient city of Xian, a former imperial capital.

He will meet President Hu Jintao and chief legislator Wu Bangguo in Beijing before travelling to Shanghai on Friday for the opening of the Shanghai World Expo, a huge multinational cultural exhibition.

"China attaches a great importance" to Sarkozy's visit, said a source in Beijing. A source in Paris added that "2010 will be an exceptional year for Franco-Chinese ties," with "a return to unclouded relations".

The French president's first state visit to China was in November 2007, six months after his election.

The following year, relations hit a bump when Sarkozy expressed shock at a fierce crackdown by Chinese forces in Tibet.

Ties suffered further in April 2008 when pro-Tibetan demonstrators booed and jostled the Olympic flame as it was carried through Paris on its way to the Beijing Games.

Tensions peaked when Sarkozy met with the Tibetan leader-in-exile, the Dalai Lama, in December 2008, before starting to ease with a meeting between Sarkozy and Hu at the G20 summit on the financial crisis last year.

"We want to develop a partnership with China in the G20," an official at the Elysee said ahead of this week's trip.

France has helped lead efforts by the G20 grouping to reform world finance and is due to preside over it from November. The Elysee said China has "a growing, decisive, major role. There is no solution without China."

The two presidents will also discuss Iran.

France and the United States are trying to win United Nations backing for new sanctions on Iran over its suspect nuclear programme, but China is reluctant to punish a major trading partner and source of oil.

Another sensitive issue for Sarkozy and Hu is China's currency policy. Beijing is accused by other countries of taking anti-competitive measures to weaken the yuan in order to keep its exports strong.

"They will not tackle that subject head-on," a French official said, explaining that Sarkozy will merely seek China's support for a general overhaul of the global monetary system by the G20.

The 2007 visit saw France and China sign 20 billion euros (about 27 billion dollars) in business deals. This time, the Elysee has said, nuclear power, aeronautic and environmental projects will be discussed but not signed.

"Big contracts will be discussed but there will be no announcements," an official said. "Those will be made when President Hu makes a state visit to France in the autumn," about six months from now.

The two countries are due to agree accords on development and education, including a plan for a 500-million-euro joint fund to support small businesses in both countries.

Others include a forest conservation project in the southern province of Hunan, a cooperation accord on sustainable development in central Hubei and another for educational exchanges between French and Chinese universities.

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