"China's development will present enormous business opportunities to the United States and other countries," Hu Jintao told a meeting of business and political leaders in Seattle on Wednesday.

His comments came before talks in Washington with George Bush, the US president.

The meeting at the White House on Thursday is expected to focus on economic tensions between the two countries.

Speaking in Seattle before flying on to Washington, Hu said it was "hardly avoidable" that trade frictions would occur given the size and rapid growth of the countries' two-way trade. But, he said, differences should not be politicised.

 

"We should properly address these problems through consultation and dialogue on an equal footing as we work to expand our business ties."

 

Currency row

 

Hu's four-day visit to the US comes amid brewing trade disputes between the two countries, primarily over the valuation of China's currency and the massive US trade deficit with China.

 

Washington believes that China's currency, the yuan, is undervalued by as much as 40%, giving Chinese exporters unfair advantages and creating deep imbalances in global trade.

 

Earlier this week a top US official criticised China's progress on the currency issue as "agonisingly slow", saying Bush was certain to raise it when the two leaders meet at the White House.

 

China says it will increase the 
flexibility of the yuan

However, US analaysts say they are expecting a breakthrough on the exchange rate issue during the meeting between the two leaders.

 

Rather, they were hoping for slow, steady progress in the months ahead.

 

In Seattle on Wednesday, Hu said he wanted to make foreign-exchange markets more efficient.

 

But he said China was not ready for a drastic change in the value of the yuan.

 

"China will continue to firmly promote financial reforms, improve the renminbi exchange rate-setting mechanism, develop the foreign exchange market, and increase the flexibility of the renminbi exchange rate," he said.

 

More competitive

 

Revaluing the yuan is a US demand which officials say will make American exports more competitive against cheaper Chinese products.

 

Revaluation would also reduce China's bilateral trade surplus with the US, which last year reached $202 billion.

 

Hu outlined steps China is taking to address US concerns, including boosting domestic demand, further opening the Chinese market to US companies, and encouraging Chinese firms to invest in the US market.