Wu, who is heading one of the largest delegations of leading Chinese officials ever to visit the US, said controversies needed to be handled calmly and "addressed according to economic law".
 
Wu, known as a tough negotiator, said that both countries should "firmly oppose trade protectionism".
 
"Confrontation does no good at all to problem-solving," she said.
 
Sanctions
 
Wu Yi heads the largest high-level delegation
ever to visit the US [Reuters]
A ballooning US trade deficit with China is putting pressure on the Bush administration, with members of congress from both parties mulling a raft of bills that would impose economic sanctions on China.
 
In 2006 the US deficit with China reached a record $232.5 bn, the largest ever with a single country and one-third the overall US deficit of $765.3 bn.
 
Many in congress are blaming the soaring deficit and the loss of one in six US manufacturing jobs since 2000 at least in part on China.
 
They say the Chinese are keeping the value of their currency artificially low, making their exports unfairly cheap.
 
But sanctions could risk a damaging trade war - undermining what is fast becoming the world's most important trading relationship - which Paulson is eager to avoid.
 
Wu and her delegation are due to hold meetings with senior congressional leaders later in the week.
 
Action
 
Pointing to growing impatience in the US congress, Paulson said China had become "a symbol of the real and imagined downside of global competition".
 
To address this, he said Beijing needed to take prompt action to redress "persistent trade and financial imbalances".
 
He said the US was not afraid of competition from China, but wanted to see Beijing act on pledges to reform its financial systems, as well as tackle other issues such as rampant product piracy.
 
"Our policy disagreements are not about the direction of change but about the pace of change," Paulson told Wu and 15 senior cabinet ministers attending the talks.
 
Susan Schwab, the US trade representative, said the Americans also raised the question of food safety at the talks amid reports about tainted pet food and toothpaste from China.
 
Other US concerns raised during the first day of talks were China's implementation of World Trade Organisation commitments; lingering "unscientific" restrictions on US agriculture products; and barriers on US environmental goods and services.
 
The twice-yearly talks, dubbed the "strategic economic dialogue", were launched last year by the Chinese and US presidents as a "management tool" for handling relations and reducing tensions between the two economic powers.