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CNBC's Quintanilla: Currency Battle In China

Treasury Secretary Henry Paulson and other top American officials are in Beijing this morning for trade talks, appealing to Chinese leaders to help preserve U-S support for free trade. CNBC’s Carl Quintanilla is following all the developments closely and updated the “Squawk Box” crew this morning, also from Beijing.

He said that the American delegation is pressing China over its currency and trade policies, hoping to alleviate trade tensions arising from the soaring American trade deficit with China.

Hank Paulson met today with his counterpart Chinese Vice Premier Wu Yi.  According to Quintanilla, it was a closed door session and not a lot of words were minced – Paulson told the Chinese,  “You’re not doing enough to let your currency appreciate. “

Wu Yi responded with a statement: “China has the genuine feeling that some American friends are not only having limited knowledge of, but harboring much misunderstanding about the reality in China. This is not conducive to the sound development of our bilateral relations.”

China did however, did allow its currency rise to the highest levels since they revalued it in 2005.

Carl Quintanilla also spoke with Commerce Secretary Carlos Gutierrez who has been involved in other closed door meetings. Speaking on a presentation made by Ben Bernanke, Gutierrez said, “That led to a very good discussion about monetary policy in China, in the U.S. and around the world.”