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China's Vice Premier Wu Yi speaks at the opening of the Strategic Economic Dialogue as the U.S. Delegation listens in the Great Hall of the People in Beijing, Thursday, Dec. 14, 2006.

Chinanews, Beijing, Dec. 14 - Chinese Vice Premier Wu Yi said on Thursday that the United States's failure to fully understand China was harming relations. She said this during the first economic dialogue between the two countries, pushing back against U.S. criticisms.

"We have had the genuine feeling that some American friends are not only having limited knowledge of, but harbouring much misunderstanding about the reality in China," Wu told U.S. Treasury Secretary Henry Paulson and other senior Washington policy-makers at the start of their two-day meeting in Beijing.

"This is not conducive to the sound development of our bilateral relations."

According to a report from Reuters, Wu said China was committed to continued market reforms and achieving a "rough balance" between imports and exports -- a key complaint of Washington, with the U.S. trade deficit with China this year set to break last year's record $202 billion.

The high-powered economic talks with the United States starting are of critical importance, Reteurs said.

Wu's opening speech focussed on the reforms China was pursuing to expand market forces in the country, with the aim of shifting the impetus of economic growth from exports to domestic demand, Reuters said.

She also said China would improve its legal system and protection of intellectual property -- another frequent U.S. complaint, as pirated films, music and other protected goods flood the Chinese market.

Source: Industry Website