Washington, April 20 (Reuters): Chinese President Hu Jintao pledged to President George W. Bush today that China would make its currency more flexible and take other steps to reduce a huge trade surplus with the US.

After a pomp-filled White House welcoming ceremony complete with a 21-gun salute and full military honours, Bush and Hu held less than an hour of talks. Both said their bilateral relationship had matured to the point where they could discuss differences openly.

“He tells me what he thinks, and I tell him what I think, and we do so with respect,” Bush said.

Hu said China wanted to boost its domestic demand and did not seek an excessively large trade surplus.

Washington would like to see China revalue its currency, the yuan, which it regards as seriously undervalued against the dollar. That would allow US exporters to compete more effectively in the Chinese market and help reduce a trade deficit that reached $202 billion last year. Hu said China would continue to improve the yuan’s exchange rate, although he gave no specifics.