"I think the signals we got back from the Chinese was they recognise this is a problem, that the imbalance is not healthy (and) that they recognise it is a source of stress," Deputy US, Trade Representative Karan Bhatia told reporters Yesterday.

"They recognise, I think, the political dynamic here and are looking to grow US exports. They're looking for the sectors where that is most substantially plausible," Bhatia said at the briefing.

Bhatia, who took office a few weeks ago, met Chinese trade officials during a visit this month to China and other Asian countries with US Trade Representative Rob Portman.

The US trade deficit with China is expected to surpass $200 billion this year after hitting a record $162 billion in 2004.

The yawning deficit has become a political problem for the US administration, which has pushed China to adopt a more flexible exchange rate and crack down on widespread counterfeiting and piracy of billions of dollars worth of American goods.

He added that lax enforcement of anti-piracy laws by China was discouraging many leading US exporters.

US trade officials invoked a rarely used World Trade Organisation article last month asking China to provide detailed information by Jan. 23 on what it is doing to reduce intellectual property theft.

While the United States still expects to hear from China, the issue was not a major topic during the recent visit and Chinese officials did not specifically say they plan to cooperate, Bhatia said.