updated 5/23/2007 4:35:53 PM ET 2007-05-23T20:35:53

The United States and China concluded high-level trade talks Wednesday with progress reported in a few areas but no breakthrough in the biggest dispute, China’s undervalued currency.

Treasury Secretary Henry Paulson and Vice Premier Wu Yi both sounded positive notes on the importance of the new high-level discussions.

But the scant signs of success left China’s critics vowing to push ahead with legislation seeking to punish China for what are seen as unfair trading practices that have driven U.S. trade deficits to record levels and cost thousands of manufacturing jobs.

Hoping to head off punitive legislation, Wu and other members of her team — the largest high-level Chinese delegation ever to visit the United States — met behind closed doors with congressional leaders after the talks with members of Bush’s Cabinet had concluded.

Paulson headed a U.S. team that included 18 Cabinet and other top economic officials, Federal Reserve Chairman Ben Bernanke among them. Wu’s team included 17 top Chinese government officials.

They were participating in the second round of Strategic Economic Dialogue talks following an initial session held last December in Beijing. The talks will take place twice a year and are designed to address economic tensions between the two countries in light of a U.S. trade deficit with China that hit an all-time high of $232.5 billion last year.

Agriculture Secretary Mike Johanns, who briefed reporters, said the U.S. raised the issue of food safety, which has been highlighted by such incidents as the deaths of pets who had eaten pet food made with tainted wheat gluten imported from China, and more meetings were planned.

The two countries agreed to more than double the number of daily passenger flights between the two nations by 2012, going from 10 to

23. Cargo flights were also increased. However, the gains fell short of the openings the administration had hoped to achieve.

In the area of financial services, China agreed to a slight expansion in business opportunities for U.S. financial service companies but not the lifting of the caps on foreign ownership of banks, securities firms and insurance companies that U.S. firms had sought. This was a setback for Paulson, the former head of investment giant Goldman Sachs, who personally lobbied Wu on this issue during a dinner at his home Monday night.

“For years, we have heard vague assurances of greater market access for American financial institutions, but they rarely seem to become reality from China,” said a disappointed Sen. Charles Schumer, D-N.Y.

There was also agreement for closer cooperation in the area of increasing use of environmental technology but no announcement that China would cut its tariffs to increase sales of U.S. energy and environmental products in China. Such an announcement had been expected.

China also rejected U.S. requests that it accelerate the revaluing of its currency, the yuan, which American manufacturers contend is undervalued by as much as 40 percent, making Chinese products cheaper for Americans and American goods more expensive in China.

Many members of Congress are pushing legislation that would impose economic sanctions on Chinese products unless China moves faster to allow its currency to rise in value. China did announce last Friday that it would allow its currency to fluctuate more on a daily basis, but critics said that was not enough to meet U.S. demands.

Senate Banking Committee Chairman Christopher Dodd, D-Conn., said the administration should cite China as a currency manipulator in an upcoming report to Congress on the subject, a designation that would trigger consultations and could eventually lead to U.S. sanctions.

Asked about the lack of progress on the currency issue, Paulson repeated what he has said in the past. “I believe it would be in their interest and the rest of the world’s interest for them to move more quickly,” he said. Slideshow: Modern China in pictures

For her part, Wu called the talks “a complete success” and said it was important to continue direct consultations between the two nations rather than resorting to “threat and sanctions.”

“Through the dialogue, we have reached much consensus and realized positive results,” she told reporters, speaking through an interpreter.

U.S. business groups had a decidedly more downbeat response.

“The Chinese must realize that the risk now lies in acting too slowly rather than acting too rapidly, not just in trade, but in addressing their own overheating economy,” said John Engler, president of the National Association of Manufacturers.

The U.S. Business and Industry Council, which represents small and medium-size manufacturing companies, said the administration should scrap the new dialogue process based on the poor results so far.

“It’s clear that this dialogue has been nothing but a cynical Bush administration exercise in spin and public relations,” said Kevin L. Kearns, president of the council. “The failure of the White House’s approach is now clear, so the ball is clearly in Congress’ court.”

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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