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A consultation mechanism will be set up between China and the United States to exchange information and minimize problems arising in the much maligned area of textiles.

Visiting US Commerce Secretary Don Evans said yesterday he viewed the scheme as an encouraging development within the industry.

Officials from the Chinese Ministry of Commerce confirmed the agreement but would not provide further details.

Evans said the bilateral channel is just part of the consensus between the two nations to increase dialogue and progress over troubled ground in the textile and apparel trades.

The countries will organize industry-to-industry exchanges to seek opportunities for bilateral co-operation, including avoiding trade disputes.

"We have also agreed to hold an exhibition to promote US textile exports to China and convene a conference that offers US states and localities the opportunity to introduce investment opportunities in the US to the Chinese textile industry," Evans said during a press conference.

Textile trade between China and the US is facing a huge challenge as US textile manufacturers attribute their job losses to increases in Chinese textile imports, which are favoured by US consumers and traders.

US-based textile companies are demanding that their government erect safeguard barriers against Chinese exports. A decision is expected in November.

Local analysts say it could seriously jeopardize the possibility of bilateral textile trade between the two sides.

Customs statistics show China imported US$447 million worth of US textiles and apparel last year, up 23.04 per cent from 2001.

Growth hit 44.5 per cent in the first six months, posing another sharp increase.

Answering Chinese complaints about US curbs on high-tech exports, Evans said high-tech trade will improve once the US gets access to Chinese companies that want to buy the equipment. Washington wants to make sure technology like supercomputers and aircraft stamping machinery is not used for military purposes.

"As soon as we can get an end-use visit agreement in place, I feel confident that it will improve the environment, improve the conditions for increasing high-technology trade," Evans said.

Local officials say China hopes to maintain an export/import balance and has been working hard to achieve that goal.

When meeting Evans on Tuesday, Commerce Vice-Minister Yu Guangzhou said: "We will encourage local companies to purchase from the US and try to expand imports from the United States."

But in order to achieve the goal, Yu stressed the US should expand its coverage of products allowed to be exported to China.

In relation to a proposal by a bipartisan group of US lawmakers to revoke China's normal trade status and impose a 27.5 per cent tariff on Chinese goods, Evans said the government is not in favour of the plan.

But he glossed over a claim that a key driver for booming exports to the United States is US firms which have invested in Chinese factories to serve their customers back home.