U.S. Says China Must Address Its Intentions

· China should end its tolerance of "rampant theft of intellectual property and counterfeiting" if it is to be considered a "responsible major global player." China must also do "much more" to allow its currency to adjust to market rates.

· China should adjust its foreign policy to focus less on national interest and more on sustaining peaceful prosperity, including ensuring North Korea's compliance with an agreement to end its nuclear programs, supporting efforts to end Iran's nuclear programs, and pledging more money to Afghanistan and Iraq. China's dealings with Sudan, Burma and other "troublesome states indicates at best a blindness to consequences and at worst something more ominous," Zoellick said.

· China should not attempt to "maneuver toward a predominance of power" in Asia by building separate alliances in Southeast Asia and other areas.

Zoellick also addressed democracy in China, saying it is "risky and mistaken" to believe the Communist Party's monopoly can be secured "through emphasizing economic growth and heightened nationalism." He said closed politics are "simply not sustainable" and that pressure is building for political reform.

"China has one umbrella labor union, but waves of strikes," Zoellick noted. "A party that came to power as a movement of peasants now confronts violent rural protests, especially against corruption. A government with massive police powers cannot control spreading crime."

Zoellick said China should consider elections at the county and provincial level, reform its judiciary and "stop harassing journalists who point out problems."