A U.S. business group on Wednesday said it welcomed China's plans to ease restrictions on foreign investment, in a sign that tensions over currency have not blocked progress on all other trade issues.

This is a positive step forward toward liberalizing China's inbound investment policies, Myron Brilliant, senior vice president for international affairs, at the U.S. Chamber of Commerce, said in a statement.

China's plan would raise the foreign investment threshold from $100 million to $300 million and increase transparency for investment approvals, the group said.

The new threshold will promote investment from abroad and foster a more open environment, Brilliant added.

The praise follows weeks of friction between the United States and China over Beijing's exchange rate policy.

President Barack Obama said on Tuesday that China's currency was undervalued, but that he had frank discussions on the issue with Chinese President Hu Jintao, who was in Washington to attend a nuclear security summit.

Hu and other Chinese officials have defended China's exchange-rate policy as an internal affair, and have said they would not bow to external pressure to change it.

However, Beijing is widely expected to revalue its currency by at least a small amount in the coming months.

CALLING ON BEN

Many U.S. lawmakers want Obama to formally label China as a currency manipulator, a step he has so far refused to take. They have also threatened to pass legislation that could lead to tariffs on some Chinese goods if Beijing does not quickly raise the value of its currency by a large amount.

Senator Charles Schumer, a New York Democrat, tried on Wednesday to get Federal Reserve Chairman Ben Bernanke to endorse tougher U.S. action against China.

Bernanke stopped short of that, but said most economists agreed China's yuan currency was undervalued and that it was one of the factors that caused the global recession.

It's an important issue and I think we should continue to press for a more flexible exchange rate, Bernanke said.

An analyst said China could throw more bones to American business in coming months to ward off U.S. legislation, but so far they haven't been willing to go very far.

Meanwhile, U.S. Trade Representative Ron Kirk said the United States was concerned about rules that block U.S. credit-card companies from processing electronic payments in China.

We want to make sure our credit-card companies are not disadvantaged, Kirk told reporters after a meeting with lawmakers on Wednesday.

Currently, only China Union Pay is permitted to process domestic electronic payments in China.

Beijing promised when it joined the World Trade Organization in 2001 to remove market access restrictions and provide national treatment for foreign credit, charge and debit card companies.

The issue is expected to be on the agenda for the Strategic and Economic Dialogue meeting in Beijing in late May and another bilateral session known as the Joint Commission on Commerce and Trade later this year.

There has been speculation the U.S. Trade Representative's office was on the verge of bringing a WTO complaint against China, but Kirk said he was not ready on Thursday to announce any such case.

Ben Bernanke Barack obama China Investment