John Snow is leading the US team

As Chinese exports have boomed in recent years, the US accuses the Chinese of unfairly benefiting from a vastly undervalued currency.

The US has long called for Beijing to increase the yuan, or better still, allow it to trade freely.

China pegs the yuan to a specific exchange rate against the dollar.

Although Beijing did bow to pressure and push the yuan 2.1% higher in July, the US says this is not enough.

Textiles issue

America says the undervalued yuan helps make Chinese exports unfairly cheap, resulting in them flooding into the US and other leading nations.

The two days of negotiations in Beijing are being led by Chinese Finance Minister Jin Renqing and US Treasury Secretary John Snow.

America has also called for China to introduce measures to boost domestic consumption as a further means to cool Chinese exports.

It further wants easier access into China for overseas banks and investors.

The two sides are also likely to renew talks on finding an agreement for a specific trade dispute on textiles.

Chinese textile exports have increased markedly since the end of set global limits at the start of 2005, much to the anger of domestic US producers.