UPDATE 2-China's yuan has already risen quite a bit--envoy

(Adds comments on U.S. election year politics)

WASHINGTON, May 14 (Reuters) - The United States should recognize how much China's currency has already risen against the U.S. dollar and reduce pressure for the yuan to rise even more, China's ambassador to the United States said on Wednesday.

"The renminbi has appreciated quite a bit ... it's already 19 percent, almost 19 percent (higher) as compared to back in July 2005," Chinese ambassador Zhou Wenzhong said in remarks at the U.S. Chamber of Commerce.

"There is only so much of this we can take, so you need to give us some time," Zhou said with a slight laugh.

Zhou also criticized "protectionistic" proposals in the U.S. Congress, which he said he would "seriously undermine the interests of both countries" if they became law.

U.S. presidential candidates Barack Obama and Hillary Clinton, both Democrats, have called for stronger U.S. action to deal with a number of China trade concerns, including currency.

"Many friends advise don't take this rhetoric too seriously, but of course we hope, we wish this rhetoric would not be made. But of course, what's more important is the policy, so we'll see," Zhou said.

U.S. manufacturers complain that China's yuan, also called the renminbi, is so undervalued that it gives Chinese exporters an unfair advantage.

Alan Holmer, the U.S. Treasury Department's special envoy to China, told the business group earlier on Wednesday that the United States welcomed a significant, and more rapid, rise in the value of the yuan since October.

"We urge China's leaders to continue this accelerated pace of appreciation," Holmer said.

Many U.S. lawmakers blame China's exchange rate policies for the U.S. trade deficit with that country, which hit a record $256.3 billion last year.

However, Zhou said it was widely known that the relative value of the two currencies was not the source of the big trade imbalance between the two countries.

Many economists point to other factors such as the much lower rate of savings in the United States compared with China.

Zhou said China was working to boost imports from the United States, adding that the two countries are already each other's second-biggest trade partner.

China is the midst of a transition from an economy driven by exports to one based more on domestic demand, he said.

As part of that transition, China will need to import more high-valued products, Zhou said.

He projected China's imports will surpass $1 trillion for the first time this year and will exceed $1.3 trillion by 2010. (Editing by Jonathan Oatis)