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Chinese President Hu Jintao exchanged views on Sunday with US President George W. Bush on bilateral relations as well as regional and international issues of common concern on the eve of the 11th Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting.

Hu said since his last meeting with Bush in Evian, France, in June, the two countries have maintained a good momentum in the development of their relations. They have scored new achievements in economic cooperation and trade as well as in the fight against terrorism.

China hopes that both sides would view and handle bilateral relations from a strategic point of view so that the China-US constructive and cooperative relations will constantly move forward, Hu said.

Bush said a good US-China relationship is important to the United States, and he will continue with his efforts for the development of the bilateral relations.

The US president said he was looking forward to the upcoming visit of Chinese Premier Wen Jiabao to the United States.

He also extended congratulations on the success of China's first manned space flight on behalf of the US government and people.

On the issue of Taiwan, Hu said China insists on the policy of "peaceful reunification and one country, two systems," and has worked with utmost efforts to resolve the issue through peaceful means.

Hu stressed China will never tolerate "Taiwan independence."

The Chinese president also said China appreciates what the US side has reiterated about its one-China policy, its adherence to the three Sino-US joint communiques and its opposition to "Taiwan independence." China hopes the US side would honor its commitments.

Bush told Hu that the US government upholds the one-China policy, observing the three US-China joint communiques, opposing Taiwan's independence. He said the United States will not change that policy.

On the issue of economic cooperation and trade, Hu said the US economy has shown signs of recovery and Chinese economy is growing fast. This will be good to the expansion of two-way trade and economic cooperation, he added.

He said China is always responsible on the issue of the exchange rate of the Chinese currency, Renminbi (RMB) yuan. China follows a market-based, single and managed floating exchange rate system, which is consistent with the current situation of China's economy, its level of financial regulation and the sustainability of its enterprises.

Practice has proved that keeping the exchange rate of RMB stable serves China's economic performance and conforms to the requirements of the economic development in the Asia-Pacific region and the whole world, Hu said.

China will further improve its rate-forming mechanism in the process of its financial reforms, he added.

The Chinese president said China-US trade has grown vigorously and benefited people of both countries. China has taken, and will continue to take, measures to balance bilateral trade with the United States.

The two sides should strengthen dialogue and resolve disputes through negotiations, Hu said, adding that China is willing to increase imports from the United States, and hopes the US side will loosen its control of exports to China.

Bush said US-China economic relations and trade are important to the United States. US-China dialogue on economic issues will be helpful to resolving existing problems in the areas.

He said the United States will continue to work for a peaceful solution to the nuclear issue on the Korean Peninsula. He said the United States highly appreciates the active role China has played in the peaceful settlement of the issue, and supports the process of the six-party Beijing talks.

Hu said the international community generally acknowledged that the six-party talks in Beijing is conducive to the settlement of the nuclear issue and should go on.

China firmly maintains peace and stability on the Korean Peninsula and supports a nuclear-free peninsula, he said, stressing that the reasonable safety concerns of the Democratic People's Republic of Korea should also be addressed.

The Chinese president said China will continue to work for a peaceful settlement of the issue through dialogue, and relevant sides should do their part in creating favorable conditions for the process.

China is ready to strengthen consultations and cooperation with all parties concerned on the issue, Hu said.

The two presidents also exchanged views on the issues of anti- terrorism and Iraq.

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