Washington - A top US Treasury official was on her way to Beijing on Friday ahead of votes in the US Senate next week on legislation to crack down on Chinese currency practices.

"While there, Under Secretary (Lael) Brainard will address China's recent efforts to strengthen domestic demand-led growth and create a more level playing field for American workers and businesses, in order to sustain the global recovery," the US Treasury Department said in a statement.

"She will also reiterate that while the renminbi has appreciated 10 percent adjusted for inflation since June 2010, the currency remains substantially undervalued, and more progress is needed," it said.

The Democratic-controlled Senate will vote late on Monday afternoon on whether to take up the currency legislation, which the White House has said it is reviewing. The Senate is expected to spend most of the week on the bill.

China has repeatedly rejected criticism that it deliberately undervalues its currency to give its companies a price advantage in international markets.

Foreign Ministry spokesman Hong Lei on Wednesday warned Washington to "refrain from politicizing" the yuan issue, restating Beijing's view that the exchange rate isn't responsible for the huge US trade deficit with China.

"We hope the US will maintain the overall interests of bilateral trade and economic relations and refrain from politicizing this issue," Hong said at the regular news briefing, adding that China is committed to moving to a more flexible exchange rate but at its own pace.

A key provision of the Senate bill would instruct the Commerce Department to treat undervalued currencies as a subsidy under US trade law, allowing companies to ask for countervailing duties against imports on a case-by-case basis.

The bill reflects growing frustration in the United States over its ballooning trade deficit with China, which hit a record $273 billion in 2010.

Many lawmakers believe China's currency practices contribute to the deficit. They argue that Beijing undervalues its currency by as much as 25 to 40 percent against the US dollar, which gives Chinese companies an unfair price advantage and has caused US companies to layoff workers or shut down.

China says it is being blamed for problems stemming from the US' own domestic economic problems.

In another development, the US Department of State announced on Thursday that Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell will arrive Beijing on Oct 11 to meet with Chinese Vice-Foreign Minister Cui Tiankai for the second round of US-China Consultations on the Asia-Pacific.

Reuters-China Daily

(China Daily 10/01/2011 page4)