Paulson to make his currency case to China's Hu

"I will not say anything other than the Treasury's view that legislation is not the proper way to proceed and deal with the currency issue," Paulson told Xinhua.

"I believe it is much more productive to have bilateral talks and engagement."

Wu is Paulson's counterpart in a twice-yearly "strategic economic dialogue" (SED) that Paulson has instituted to try to persuade China that difficult reforms are in its own interest.

"Both sides agreed the SED is important and that we need to work and achieve positive outcomes for both countries," he said.

Paulson said the two sides had drafted "an ambitious work schedule" that will focus on a smaller number of issues deemed the most important. He did not identify the topics.

Paulson would meet Hu on Wednesday afternoon and also planned a second round of talks with Wu, Treasury officials said.

He will also have meetings with the China Securities Regulatory Commission, the National Development and Reform Commission, the main planning agency, and the State Forestry Administration.

He is expected to brief reporters before flying back to Washington on Wednesday evening.