China is "greatly concerned" about the potential impact of a dispute over China's surging textile exports on sino-Us trade ties, vice-premier Wu Yi told senior Us trade officials saturday, state media reported.

The textile issue is a "major problem" in the development of sino-Us economic and trade cooperation and the Chinese government is "greatly concerned" about the possible impact, Wu said in meetings with secretary of Commerce Carlos Gutierrez and Trade Representative Rob Portman. Wu was quoted by Xinhua news agency.

Gutierrez warned Thursday that China risks "an outbreak of protectionism" if current trade tensions are not addressed and this may lead to further textile restrictions.

China's Commerce Minister Bo Xilai expressed hope that the conflict can be resolved by negotiation, state television reported.

"We attach great importance to our relations with the United states," CCTV quoted Bo as saying on meeting Gutierrez.

Bo added that he "hoped the differences can be resolved by negotiation."

Xinhua said talks between the two officials lasted well over the

scheduled hour.

"sino-Us trade witnessed such great progress in the last 26 or 27 years and we two countries should have the capability to properly deal with the textile trade issue and other questions," Xinhua quoted Bo as saying.

"China has become the third largest trade partner of the United states and it's natural for some problems to emerge in such a developing progress."

After a decades-old global quota system was abolished on January 1, China imposed duties of between two and four percent on 148 types of textile goods to limit the impact on its global trading partners.