A U.S. congressional panel Friday approved a bill to set punishing duties on imports from China to offset so called "undervalued currency," a move that might escalate trade disputes between the two countries.

The House of Representatives Ways and Means Committee backed the legislation on a voice vote, clearing the way for the full House to take up the measure next week.

Facing November's midterm elections shaped by voter anger at the sour economy, U.S. lawmakers are weighing bills that would slap sanctions on Chinese goods, amid accusations that Beijing keeps its currency -- and thereby its exports -- artificially cheap.

The argument is viewed by many economists as protectionism.

They warned that protectionist moves by the U.S. would ultimately hurt U.S.-China trade relations, which are becoming more and more important for the bumpy global recovery

They also noted that the U.S. lawmakers' move could set in motion a process for retaliation.

Analysts say that the bill may never become law, however, as it faces an uncertain future in the Senate.

U.S. President Barack Obama said Monday that China's fast economic growth is "good for" the United States. U.S. Treasury Secretary Timothy Geithner also said recently that China's growth is critical for the U.S.

China's Premier Wen Jiabao said Thursday that politicizing the currency issue does no good to the bilateral relationship.