BEIJING (AP) -- U.S. Treasury Secretary Henry Paulson says he told Chinese leaders that Washington is making progress in resolving the U.S. credit crisis but cautioned there will be ''more bumps'' ahead.
Paulson met on Wednesday with President Hu Jintao and Beijing's new point man on strained relations with Washington, Wang Qishan.
Paulson said he explained the United States was going through a ''period of turmoil'' but is a fundamentally strong economy.
''I believe we are making progress'' in calming troubled credit markets, he said. However, he cautioned that the problems would require more hard work.
''I continue to think there will be some more bumps in the road,'' he said.
Paulson declined to give details on what Chinese leaders said to him.
His visit to talk about U.S.-Chinese cooperation on trade, energy and the environment has been overshadowed by alarm at the credit crisis triggered by defaults on subprime mortgages.
Premier Wen Jiabao, China's top economic official, declared himself ''deeply worried'' last month about American market turmoil, the decline of the dollar and ''where the U.S. economy is heading.''
Chinese banks hold U.S. risky mortgage-backed securities and have set aside reserves for possible losses.
Economists have cut China's growth forecast this year due to slowing U.S. demand for Chinese goods.
Also, Washington's decision to respond to the crisis by cutting interest rates has complicated Beijing's effort to cool its fast-growing economy by raising its own rates.
Economists say that if the gap between rates in the two countries grows too large, it could draw foreign money into China, fueling inflation that already is at an almost 12-year high.
Paulson was in Beijing to prepare for the next meeting of the U.S.-Chinese Strategic Economic Dialogue, scheduled for June. The process was launched in 2006 to address trade tensions and deflect pressure from U.S. critics for punitive action over Beijing's huge trade surplus and currency controls.
Wang, former president of a Chinese state-owned bank, succeeded retired Vice Premier Wu Yi, China's top problem-solver, as Paulson's counterpart. Wang's new duties also include reforming China's state-run banking and finance system.
Paulson is the most senior U.S. official to visit Beijing since protests in Tibet and the government's crackdown. Washington has appealed to Beijing for restraint and to consult with representatives of the Dalai Lama, the exiled Tibetan leader.
Paulson was also scheduled to meet Wen on Thursday, a reflection of the importance Beijing places on the process aimed at averting threats to China's access to American markets for its exports.
