But Snow, who wraps up a week-long tour of China on Tuesday, repeated praise of the communist leadership for taking concrete steps to prise open the country's heavily regulated economy.

Speaking shortly before annual Sino-US economic talks here ended, Snow said legislation threatened by US senators that would slap a 27.5 percent tariff on all imports from China without more currency reform was "ill-conceived".

"But it does have some support. We have to acknowledge that," he told a news conference.

The Treasury was due to release a semi-annual report on global exchange rate policies at the weekend but postponed its publication until early November to incorporate the evidence gathered during Snow's visit.

The upbeat tone of Snow's appraisal suggests that the Treasury will disappoint protectionist US lawmakers who want the report to label China a currency "manipulator", which could open the way to US trade sanctions.

In a joint statement issued after the two-day talks, Chinese authorities "affirmed their intention to enhance the flexibility and strengthen the role of market forces in their managed floating exchange rate regime".

"Both sides agreed that exchange rate policy is a sovereign decision, but can have a global impact," added the statement, which also noted the importance of financial-sector reforms in promoting China's economic growth.

Snow said he had been "encouraged" by the response from Finance Minister Jin Renqing and central bank governor Zhou Xiaochuan to his reform proposals, which would throw open China's financial markets to much greater foreign competition.

He said there was "clear evidence that China is moving" on a range of economic and financial fronts.

"But we need to see movement. Let's make no mistake about it. Congress will demand clear movement," he said.

The ultimate US objective, Snow said, is to see the Chinese yuan "eventually move like the dollar, the euro and other freely floating currencies".

"We recognise that that's going to take some time."

Foreign critics have accused the Chinese authorities of deliberately keeping the yuan undervalued to give an unfair boost to Chinese goods sold overseas and so fuel the country's dramatic export-led growth.

A long-awaited switch in July by China from a dollar peg to a tightly managed float for the yuan has done little to assuage critics in the US Congress and beyond.

Snow reiterated the dominant message of his lengthy tour -- that China needs to deepen its financial markets and foster domestic consumption both for its own good and for that of the global economy.

In short, the US proposals would encourage Chinese consumers, who save nearly half their income, to become like big-spending Americans fully armed for retail battle with credit cards and an array of consumer finance options.

In all his meetings with top Chinese leaders, Snow said, the talks went "well beyond the currency as such".

"The currency issue is part of a much larger set of issues that basically go to financial market modernisation," he said.

At the meeting, Snow unveiled a list of US priorities for reform in China's financial sector that calls for far more participation for foreign banks, insurers and brokerages in the tightly run domestic market.

The shopping list urges China to create a currency futures market, to speed up privatisation of state-owned companies and to set up an independent credit-rating agency so that financial risk can be better evaluated.

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