Three weeks before the U.S. is to deliver a report on foreign exchange, China and the U.S. are still bogging down the yuan dispute despite their war of words getting a little softened as senior Chinese trade officials launch a wave of diplomacy in Washington to defend China's currency policy.

Vice Commerce Minister Zhong Shan said in a speech Wednesday after meeting officials with the Treasury and Commerce Departments that the appreciation of the yuan was not "a good recipe" for solving the U.S.-China trade deficit.

It's in nobody's interest to see big rises in the yuan or big declines in the dollar, which will upset the world economy, Zhong noted, adding that Beijing will not bend to "outside pressure."

During his brief 30-hour visit to the U.S. to smooth bilateral tensions, Zhong contacted many government officials, congressmen, businessmen and media outlets. He expressed confidence that a long-term approach and open lines of communication can help solve the problems.

Speaking after the meeting, U.S. Treasury Secretary Timothy Geithner said that he believed China would allow its currency to appreciate over time, but he admitted that the U.S. "can't force them to make that change."

The Wall Street Journal said Thursday that the countries struck a more conciliatory tone, though they didn't offer immediate solutions for resolving their differences. The New York Times noted that the Chinese government is giving no indication that it will change its exchange rate policy.

The U.S. Treasury Department will decide by April 15 whether to label China a currency manipulator as part of a semiannual report to Congress on the currency practices of major trading partners. A group of senators recently introduced legislation that would force the administration to take action, including applying tariffs to imports from China, if Beijing fails to act on its currency. The Obama administration declined to take the move in 2009, as did the Bush administration. An analysis by the Financial Times said that "this time they look more serious," with "more willingness to unsheathe the saber rather than just rattle it."

Fred Bergsten, director of the Peterson Institute for International Economics, a Washington-based think tank, estimates a "trade correction," brought about by China allowing its currency to appreciate by 25 percent to 40 percent, would make the current-account deficit smaller by 100 billion to 150 billion U.S. dollars and generate an additional 600,000 to 1.2 million U.S. jobs.

Cao Honghui, director of the Financial Market Research Office of the Chinese Academy of Social Sciences, argued that Bergsten's estimation is mainly based on the China trade surplus to the U.S., which the U.S. overrates by 30 percent.

"Moreover, against the background of globalization, the U.S. is unable to produce the labor-intensive products such as toys, shoes and socks, even if the yuan is raised 100 percent," Cao said.

Zhong said China has actually created many jobs for the U.S., as many companies in trade, distribution and retailing hire a large number of employees when doing business with China, such as General Motors and retailer Wal-mart.

Joseph Brusuelas, chief economist at Brusuelas Analytics, warned in a research report that naming China a manipulator "will exacerbate economic tensions between the U.S. and China, and could push the Obama administration to adopt a counterproductive set of policies that would endanger the nascent global economic recovery." National vs group interests

The call for appreciation can also be heard in China. Some Chinese executives are joining the U.S. in backing a stronger yuan, Business Week reported, citing Yang Yuanqing, chief executive officer of Beijing-based computer maker Lenovo Group, Qin Xiao, chairman of China Merchants Bank. and Chen Daifu, chairman of Hunan Lengshuijiang Iron & Steel Group.

Liu Ligang, chief economist at the Australia and New Zealand Banking Group in China, said it indicates that various industries in China have diversified interests on the exchange rate issue and that Chinese business elites enjoy openness to express their opinions over national economic policies.

"Debate on the value of the yuan is open to the public, but the Chinese government, which has national interests in mind, has the final say on the policy," Liu said.

Zhou Shijian, a senior research fellow at the Center for U.S.-China Relations at Tsinghua University, said the current situation is that exports are more significant than imports for China because they make money for the country.

Premier Wen Jiabao said Tuesday that the estimated trade deficit in March is expected to hit 8 billion dollars, the first deficit since April 2004.

"The gradual appreciation of the Chinese currency in the past has forced thousands of China's export-oriented enterprises to shut down, and the predicted trade deficit again demonstrates that China should not allow its currency to appreciate now," Zhou said.

He Maochun, a professor at the Institute of International Studies at Tsinghua University, said China's currency reform is running normally and will not speed up nor slow down, and China's yuan will not be tightly pegged to the U.S. dollar.

China will limit the yuan's appreciation to 4 percent over the next 12 months because of a "super cautious" outlook on the global economy, Nouriel Roubini, a professor at New York University, told Bloomberg.