China is regarded as one of the world's leading sources of counterfeit goods -- ranging from music and clothes to sporting goods and medicines. Despite repeated official promises to crack down on the problem, U.S. officials say Chinese counterfeits cost legitimate producers up to $50 billion a year in lost potential sales.
Hu said he made it clear to Bush that Beijing stood ready to increase cooperation with the United States in order to protect intellectual-property rights and crack down on counterfeiting.
The Chinese president also said Beijing was ready to implement other market reforms urged by the United States.
"We are planning to implement a policy that is good for China and the world," Hu said. "And we are going to definitely implement the reform of the yuan currency exchange-rate mechanism."
Bush has called for Beijing to rein in China's growing trade surplus and make changes to its foreign-exchange-rate mechanism so that American firms have a fair chance to do business within China.
"Access to American markets has played an important role in China's economic development. And China needs to provide a level playing field for American farmers and businesses seeking access to China's market," Bush said. "The United States supported China's membership in the World Trade Organization because we believe that the cause of free and fair trade is advanced if China plays by the same global rules as everyone else."
U.S. Secretary of State Condoleezza Rice, who is traveling with Bush, said the talks were more detailed and specific than any previous discussions with China about fighting copyright theft and other intellectual piracy.
The Rights Issue
Meanwhile, President Bush urged greater individual liberties in China -- including steps that would allow greater religious freedom. It was a message that Bush underscored during a visit to a Christian church in Beijing early today.
"It is important that social, political, and religious freedoms grow in China," Bush said. "And we encourage China to continue making the historic transition to greater freedom."
China recently sentenced a Protestant Christian minister, his wife, and her brother to prison terms of up to three years for illegally printing Bibles and other Christian publications. In response, Bush has spoken of Beijing's rival Taiwan as an example of a model democracy.
Rice told reporters that despite China's promises, she expected human rights to remain an issue in U.S.-Chinese relations for years to come.
"We have certainly not seen the progress that we would expect," Rice said. "And I think we will have to keep working on it. We have had a special rapporteur here on human rights. That's a step forward. But obviously, this is a conversation in the long haul."
Chinese Foreign Ministry spokesman Kong Quan responded to the U.S. pressure over human rights.
"President Hu briefed President Bush on the development and current situation of China's democracy and human rights," Kong said, according to Reuters. "At the same time, he emphasized the notable and historical improvements China has made on human rights since the founding of the People's Republic of China. The Chinese government is implementing legitimate democratic elections, policy-making and supervisory systems. He stressed that China will continue to build a democratic system based on Chinese characteristics and the will of the Chinese people and we will continuously improve the situation in which Chinese people will be able to enjoy more human rights."
The Chinese president brushed aside Bush's remarks on Taiwan's democratic record. Instead, Hu stressed that the U.S. president has consistently supported the "one-China policy" that views Taiwan and China as part of one country.
"I reaffirmed to President Bush that the Chinese government and the Chinese people are committed to peace and stability in the Taiwan Straits," Hu said. "And we are ready to do our utmost, with all sincerity, to strive for the prospect of peaceful reunification of our country. This being said, we will by no means tolerate so-called Taiwan independence. And we highly appreciate that President Bush on various occasions has stated his commitment to the one-China policy, the Three Joint Communiques, and his opposition to so-called Taiwan independence"
Rice said that Washington remained concerned about China's growing military buildup in Asia. But she said the United States would continue to work for a balance of power in the region. She said that meant U.S. military forces would maintain a presence in Asia as part of that balance.