The US Trade Representative (USTR) office is leading an inter-agency "top-to-bottom" review of US trade policy with China, Deputy US Trade Representative Karan Bhatia said.

"In upcoming weeks, we will lay out our findings and recommendations," Bhatia said of the restructuring process at a US-China Business Council conference in Washington, noting that US trade deficit with China could have exceeded 200 billion dollars in 2005.

The review "has been a valuable effort and one that bears repeating from time to time to make sure that our trade policy with respect to China remains on course."

When asked for details of the review, Bhatia said he did not want to speculate.

"We are looking forward to laying those recommendations and analyses out when (they are) concluded," he told reporters.

But Bhatia emphasized to business leaders at the conference that many Americans were "profoundly uneasy over the current state of our trade relationship," and there is growing frustration that China is not 'playing by the rules.'

"Exhibit number one, of course, is the trade deficit. That deficit exceeded 200 billion dollars in 2005 -- the largest bilateral trade imbalance in the history of the world.

"Simply stated: an imbalance of this magnitude is not sustainable, either economically or politically, over the long term," he added.

"One need only ask whether -- if the tables were turned -- China would tolerate a bilateral trade imbalance of that size with the United States?"

As the trade figures sink deeper into the read, US legislators have threatened to pass legislation slapping hefty tariffs on Chinese imports if Beijing refuses to float its currency, the yuan.

China's US critics insist that a 2.1 percent revaluation of the yuan in July was not nearly enough to lift the currency to a truer value against the dollar and so curb the flood of Chinese exports.

But the US government has been more measured in its response, welcoming the July revamp while politely asking for more.

Bhatia said Americans were proud of their ability to compete, but could not do so when "China is offering generous subsidies to favored industries, creating barriers to American products, and following currency policies that inflate the price of US imports while making Chinese imports to the United States artificially cheap.

"Nor do Americans believe that China is competing fairly when rampant piracy, counterfeiting, and copyright infringement cost American businesses billions of dollars each year," he said.

"It is theft pure and simple, and American businesses are right to insist that it stop," he said.

"Camcorders have no place in movie theaters, and factories turning out rip-offs of everything from handbags to autos need to be shut down."

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