UPDATE 2-US Treasury Secy to make currency plea in Beijing

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By David Lawder

WASHINGTON, July 24 (Reuters) - U.S. Treasury Secretary Henry Paulson will visit Beijing next week to make a last-minute plea to Chinese leaders for more currency flexibility as the U.S. Congress prepares to act on legislation to curb growing trade imbalances with China.

The Treasury said on Tuesday that Paulson will meet with top Chinese officials including President Hu Jintao and Vice Premier Wu Yi to discuss "issues of concern to the U.S. Congress" on July 31 and Aug. 1.

"This trip is part of an ongoing process to strengthen our strategic economic relationship -- to address long-term issues such as working with China to rebalance its growth and increase the flexibility of its currency and also to address short-term issues as they arise," Paulson said in a statement.

The trip appeared to be an effort to warn Chinese officials about impending congressional action and to head off a possible backlash that could threaten the future of Paulson's strategic economic dialogue, an initiative that brings together top-level U.S. and Chinese leaders to discuss key economic issues.

The meetings in Beijing were scheduled as the U.S. Senate Finance Committee is preparing to draft legislation intended to boost pressure on China to let its currency, the yuan <CNY=> <CNYNDF=> <CNY=CFXS>, rise in value.

Many lawmakers and U.S. manufacturers say China enjoys an unfair price advantage resulting from Beijing's practice of managing the yuan's value to keep its products cheap in U.S. consumer markets.

The Senate panel, expected to start incorporating previously announced proposals into a bill on Thursday, will consider allowing the Federal Reserve and other central banks to intervene in currency markets to counteract the undervalued yuan. It also will consider potentially allowing U.S. companies to seek anti-dumping duties on Chinese imports.