INTERVIEW - China needs to do more on yuan - U.S. Commerce's Locke

BEIJING (Reuters) - The United States has been pleased with China's progress in raising the value of its currency so far, but it still needs to do more, U.S. Commerce Secretary Gary Locke said on Monday, while also urging greater access to China's markets.

The comments by Locke come during President Barack Obama's visit to China, during which global imbalances will play a significant role in discussions with Chinese officials.

They also follow a Chinese commerce ministry official's retort to mounting calls for the yuan to appreciate, saying the yuan is not the root of Beijing's large trade surplus and that the country needs a stable currency policy.

"I think it's quite clear all around the world as to the views of what China should do with its currency," Locke told Reuters in an interview.

"The United States has been pleased with some of the progress made over time, but more needs to be done."

U.S. Treasury Secretary Timothy Geithner has had "good and frank" discussions with Chinese officials on the currency issue in recent days, and President Obama will likely address the issue directly with Chinese President Hu Jintao when he meets him in Beijing, Locke said.

Locke added that, for the United States to increase exports to China and thereby reduce its large bilateral trade deficit, Beijing would need to improve transparency, its protection of intellectual property rights, and market access.

"Exports of American products and services to China is key, but for that to happen, China needs to make sure that they don't engage in protectionism, don't for instance say that various products and services can only be done by their domestic companies or their national companies," he said.

Locke cited the package delivery, alternative energy and energy efficiency industries as examples of sectors in which U.S. companies need greater access.

Locke added that the White House had recently initiated a review of a controversial policy for restricting U.S. exports of high-tech goods with dual civilian and military applications, something Beijing has long complained about.

"This is an example where China can buy those items from United States companies and help reduce the trade imbalance at the same time," he said, declining to offer a timetable for when the review might be finished.

(Editing by Ken Wills)