The plight of the dissident, who was sentenced to 11 years in prison last year on subversion charges, is the latest issue to cloud China-US relations, already strained over the value of the yuan and a litany of trade disputes.

Holder confirmed Wednesday that Chinese President Hu Jintao would visit the United States in January -- meaning he and US President Barack Obama will soon have an opportunity for wide-ranging talks that could touch on Liu's case.

"The issue did come up. This is an area in which the United States and China have a fundamental disagreement," Holder told a press conference on the second day of a visit to China, during which he met with several top officials.

"President Obama has made clear his position on the issue. We believe that China should respect the fundamental human rights of all of its citizens and that includes Liu."

Liu, 54, was jailed after co-authoring Charter 08, a bold manifesto calling for political reform in one-party Communist-ruled China.

The writer was awarded the Nobel Peace Prize on October 8 -- enraging Beijing, which says the move is tantamount to "encouraging crime" and is disrespectful to China's justice system.

Liu's wife has been under house arrest since his win and several of his supporters have either received official warnings or been taken into police custody, activists say.

Obama, the 2009 Nobel peace laureate, has led Western calls for Liu's immediate release, saying the one-time university professor has "sacrificed his freedom for his beliefs".

Earlier this month, a commission of US lawmakers and government officials had sharply criticised what it called an "increasingly harsh" crackdown on rights activists and lawyers including Liu and called for his release.

China on Thursday hit back over the report by the Congressional-Executive Commission on China, warning that it would not tolerate any interference in its internal affairs from a body "full of ignorance and prejudice".

Holder told reporters that Liu's case was not the main thrust of his talks with Foreign Minister Yang Jiechi, Justice Minister Wu Aiying, Public Security Minister Meng Jianzhu and China's top security chief Zhou Yongkang.

The US attorney general said the meetings focused on cooperation on law enforcement issues, intellectual property rights protection and the rule of law.

Copyright infringement has been a big issue in US-China trade ties. Beijing has repeatedly pledged to combat counterfeiting and launched various short-term crackdowns over the years but pirated goods remain freely available.

China's State Council, or cabinet, on Tuesday said the country would launch a six-month campaign against the manufacture and sale of counterfeit goods, and Holder said he was "heartened" by the move but hoped it could last longer.

"Six months is a good testing time period to see if the measures that they've proposed are going to have a measurable impact, and if they do, my hope would be that they would be continued beyond that period," he said.

earlier related report
China hits out at US commission's report on human rights
Beijing (AFP) Oct 21, 2010 - China on Thursday warned a US commission of lawmakers and government officials to stop interfering in its internal affairs, after it released a report criticising Beijing's human rights record.

The Congressional-Executive Commission on China voiced concern that rights conditions had deteriorated in the past year, pointing the finger at what it called an "increasingly harsh" crackdown on rights activists and lawyers.

"The chilling effects of political imprisonment result in lost opportunities for the Chinese government to make progress on, and for Chinese citizens to enjoy, the development of human rights and the rule of law," a commission statement said.

The report was dated October 10 -- just two days after jailed Chinese dissident Liu Xiaobo, who co-authored a petition calling for political reform in China that was widely circulated online, was awarded the Nobel Peace Prize.

"This so-called committee always looks through coloured glasses, distorts the facts, makes irresponsible remarks about China's social system and related policies and improper accusations," foreign ministry spokesman Ma Zhaoxu said.

"Its behaviour is full of ignorance and prejudice," Ma said in a statement.

"We advise this committee to dance to a different tune, to stop publishing these types of reports and stop the misdeed of interfering in China's internal affairs."

The commission is made up of nine senators, nine congressmen and five senior administration officials, according to its website at http://www.cecc.gov.

In its report, it calls for the release of Liu as well as other prominent dissidents such as attorney Gao Zhisheng and activist Hu Jia, accusing the authorities of using the criminal code to "quell free expression".

One of the commission's co-chairmen is congressman Sander Levin, who is also head of the House Ways and Means Committee, which spearheaded legislation that could open the door to sanctions on China over its yuan exchange rate policy.

The bill passed last month urges the US government to consider Beijing's currency policy as an improper trade subsidy and expand the powers of the Commerce Department by letting it slap retaliatory tariffs on Chinese goods.

The US Senate has signalled it will take up a companion bill after the November 2 midterm elections.

US lawmakers have led the charge against Beijing over the value of the yuan, saying it is artificially undervalued, giving Chinese exporters an unfair trade advantage.

The administration of US President Barack Obama had treaded a careful path, criticising Beijing but also twice delaying the publication of a Treasury Department report which could have labeled China a currency manipulator.

The two countries have been at odds in recent months over other issues, including the case of Liu, with Washington calling for his immediate release.

US Attorney General Eric Holder said Thursday that Washington and Beijing had a "fundamental disagreement" on the issue, adding he had raised it this week in meetings with key Chinese officials.

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