The yuan is a key bone of contention for many in the US

Mr Snow wants China to widen the exposure of China's currency, the yuan, to more market forces.

Washington says the weak currency gives China an unfair edge in the export market, damaging US manufacturers.

But China is also a key supporter of the US budget deficit, as its central bank builds up huge dollar reserves.

That stockpile - valued at $711bn by the end of June - is seen by some in China as a dangerous development.

"It's not affordable for China to continue to absorb such a huge increase in foreign exchange reserves," Yu Yongding, head of economics and politics at the Chinese Academy of Social Sciences and a member of the People's Bank of China's monetary policy committee, told Reuters in an interview.

"This kind of practice is not very conducive to China's long-term growth."

Rapid expansion

So far, Chinese growth seems to be holding up.

John Snow is keen to head off calls for sanctions

For the past two years the economy has expanded more than 9% annually, and some predictions expect a similar performance in 2005 - despite government attempts to cool the breakneck pace with taxes and capital investment limitations.

But the growth is also a bone of contention for many in the US and elsewhere.

China's textile industry, for example, has expanded exports of some products five- or sevenfold since an international tariff and quota deal expired at the start of this year, triggering painful rows with the European Union and the US.

And the yuan is a key issue.

Floating point

After a decade pegged to a specific rate against the dollar and repeated calls from the US and elsewhere, China finally pushed the yuan 2.1% higher in July.

It is now permitted to float within a narrow band - albeit one too narrow for Mr Snow and many others.

"We are anxious to see the Chinese fulfil the commitment they made to allow market forces to play a larger role in setting the value of their exchange rate over time," Mr Snow told reporters in Tokyo before setting off for Shanghai.

That, he said, would help the Chinese "deal with discontinuities in their economy".

Domestic demand also needed to grow, he said - a development which could help offset some of the export growth as well as helping suck in imports.

For some in the US, however, Mr Snow's economic diplomacy is nowhere near enough.

Many in Congress are calling for a Treasury report due in November to label China a "currency manipulator" - a move which would lay it open to trade sanctions.