Beijing, July 15 (DPA) The US Wednesday urged China to do more to open its economy to free trade and allow greater flexibility in its currency exchange rate.

'If China allowed for greater flexibility in its exchange rate and further opened up its domestic markets for imports and foreign direct investment, it would accelerate the world's return to growth,' US Secretary of Commerce Gary Locke said in a speech in Beijing.

Locke said China was continuing to subsidise domestic firms unfairly, making only limited progress on protecting intellectual property, maintaining barriers to foreign businesses and needed 'a recommitment to enforcing international trade laws and agreements'.

'Unfairly subsidising domestic companies or denying multinational companies access to local markets and government procurement contracts has the potential to be a serious threat to trade cooperation,' he told members of the American Chamber of Commerce and the US-China Business Council.

Locke conceded that China had made 'tremendous strides' in protecting intellectual property (IP) in recent years.

'However, American companies in fields as diverse as energy, technology, entertainment and pharmaceuticals still lose billions of dollars every year in China from IP theft,' he said.

US critics say slow appreciation of China's undervalued currency gives it an unfair economic advantage by making its exports cheaper and fuelling its large trade surplus.

Locke is visiting China, along with US Energy Secretary Steven Chu, in a delegation to discuss climate change with Chinese officials.