The U.S. Treasury Department says it will urge China to let its currency strengthen further, when officials from the two countries meet in Beijing this week.
U.S. Treasury official David McCormick said Monday that China has made "very significant progress" in currency reform, and that Washington wants to see that process continue.
McCormick said Treasury Secretary Henry Paulson will raise the currency issue during the talks in China's capital Thursday and Friday. The meeting will be the fifth round of a U.S.-China Strategic Economic Dialogue that began in 2006.
U.S. manufacturers have long complained that Beijing is keeping the Chinese yuan artificially weak, to give its exporters an unfair trade advantage.
The yuan fell by a record proportion against the dollar Monday, fueling speculation that China is weakening its currency to support Chinese exporters as the global economy falters.
Despite Monday's drop, China has allowed the yuan to strengthen by about 20 percent against the dollar since loosening its fixed exchange rate system three years ago.
McCormick said currency reform can reduce China's reliance on exports and refocus its attention on boosting domestic demand to counter the global financial crisis.
Some information for this report was provided by AP, Bloomberg and Reuters.