President Bush says he told the leader of a Chinese delegation to Washington that the United States is carefully watching whether Beijing will allow its currency to strengthen.
Mr. Bush made his remarks to reporters at the White House Thursday following his meeting with Chinese Vice Premier Wu Yi.
The president said that allowing the yuan to appreciate is one way to resolve a 233-billion dollar trade deficit that the United States has with China.
Some U.S. lawmakers say they are frustrated that China is not moving faster to increase the value of its currency. China's critics say Beijing artificially depresses the value of the yuan, making Chinese products unfairly cheap, and raising the price of U.S.-made goods in China.
China has said it will gradually increase the range in which the yuan can appreciate.
Wu and her U.S. counterpart, Treasury Secretary Henry Paulson wrapped up economic discussions with U.S. officials on Wednesday.
They say the talks cleared the way for progress on several issues, including financial services, energy, the environment and civil aviation