A U.S. military presence in the Pacific is essential to restrain Chinese assertiveness, Washington's defence chief said on Friday, describing China's technology advances as a challenge to U.S. forces in the region.

U.S. Defence Secretary Robert Gates' comments are likely to add to tensions over political and economic quarrels between the two superpowers just days before Chinese President Hu Jintao visits the United States.

President Barack Obama hosts Hu for a state visit on Jan. 19. U.S. officials say Obama will raise geopolitical problems such as Iran and North Korea as well as trade issues that bedevil ties between the world's two biggest economies.

Setting the tone for friction during the summit over the huge trade imbalance in Beijing's favour, U.S. Commerce Secretary Gary Locke complained on Thursday that China often failed to keep promises to open its markets and called for a more equitable commercial relationship. Such differences would always weigh on ties, some Chinese analysts said.

With irreconcilable interests, it is impossible to eliminate policy differences, which limits the good relations, Wu Xinbo, a researcher at the Center for American Studies at Fudan University in Shanghai wrote in the English-language Global Times on Friday.

Today, China is disappointed, dissatisfied and confused by the series of hardline policies against China in the second year of the Obama administration. China is worried that this is a sign of a current or future major reversal in U.S. policy and strategy toward China.

Gates, in Japan after a visit to China earlier this week, said in a speech that advances by China's military in cyber and anti-satellite warfare technology could challenge the ability of U.S. forces to operate in the Pacific.

While saying he did not see China as an inevitable strategic adversary, Gates stressed the importance of U.S. military ties with Japan, where about 49,000 U.S. military personnel are stationed.

Without the forward presence of U.S. troops in Japan, China might behave more assertively towards its neighbours, he said.

Gates cited a territorial dispute between Japan and China that flared last year, calling it an example of why the U.S. alliance with Japan was so important.

The warning came days after China held its first test flight of a stealth fighter jet while Gates was in Beijing on a trip aimed at easing strained military ties.

China also plans to develop aircraft carriers, anti-satellite missiles and other advanced systems which have alarmed the region and the United States, the dominant military power in the Pacific.

MILITARY PROGRAMME A SOURCE OF CONCERN

Questions about (China's) intentions and opaque military modernisation programme have been a source of concern to its neighbours, Gates told university students in Tokyo.

Questions about China's growing role in the region manifest themselves in territorial disputes, most recently in the incident in September near the Senkaku Islands, Gates said, using the Japanese name for them.

In China they are called the Diaoyu islands.

Gates said the United States had no doubt Hu was in control of China's military after the test flight of the stealth fighter jet had apparently caught China's civilian leaders unaware.

He said the incident was a worry, highlighting the importance of U.S.-China dialogue on military issues with both civilian and military officials.

While China's unveiling of the stealth fighter this week may have grabbed headlines, foreign powers are more worried about a growing naval build-up, especially as China has disputes over maritime boundaries with many of its neighbours.

But it will not only be military strains that set the tone of Hu's talks in Washington. He will face tough questions over China's economic policies.

Locke's critical remarks followed a speech by U.S. Treasury Secretary Timothy Geithner, who urged Beijing to move faster in allowing its currency to appreciate, to remove other trade barriers and to revise policies that forcefully tilt the China market playing field in the favour of Chinese firms.

Many U.S. lawmakers direct their ire at China's currency policy. They contend China deliberately undervalues its yuan by as much as 15 percent to 40 percent to give its companies an unfair price advantage.

New trade figures released on Thursday showed the U.S. trade deficit with China alone totaled $252 billion during the first 11 months of 2010, keeping it on track to surpass the annual record of $268 billion in 2008.

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