Chinese Ambassador Peng Keyu was born just one year after the founding of the People's Republic of China in 1949. While the country has...

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Chinese Ambassador Peng Keyu was born just one year after the founding of the People’s Republic of China in 1949.

While the country has made enormous progress since then, it still has not solved the problem of rural poverty, Peng said, addressing a Seattle gathering Monday night at the Westin Hotel.

Peng, who is China’s consul general in San Francisco, said Americans need to understand China’s difficulties as well as its much-touted economic growth.

“Not all development is like Shanghai,” he said. “The central part of the country is very backward. We have 26 million people under the poverty line.”

Peng’s talk, during an early celebration of China’s National Day Oct. 1, appeared aimed at quelling fears that China’s rise is a threat to the United States.

The country has a goal of building a “moderately prosperous society,” Peng said, adding that China’s per capita GDP of $1,200 is just one-thirtieth that of the U.S.

Relations between the U.S. and China have been strained this year over economic issues, including the value of the Chinese currency and a flood of Chinese textiles coming into this country.

Congress has reacted sharply, introducing more than 20 bills aimed at China, many of them punitive.

Besides the challenge China faces over the widening gap between rich and poor, there is an underlying message its leaders want to send outside, said Joseph Borich, executive director of the Washington State China Relations Council.

The message is “You really don’t have to worry about us because we’re still a struggling nation,” he said.

Peng urged the U.S. to lift restrictions on commodity and technology exports to China to help address the trade gap.

Over the past year, he said, he has traveled to Washington state every two weeks on average.

He noted that the trade volume between the state and China will be larger this year because China has purchased so many Boeing planes.

After his speech, Peng sat at a banquet table between Lt. Gov. Brad Owen and Secretary of State Sam Reed.

Yesterday, he hosted a lunch for a dozen business leaders to thank them for helping organize local events for Chinese President Hu Jintao.

Hu postponed his trip after Hurricane Katrina.

That visit isn’t likely to happen this year, said Borich.

President Bush met with Hu last week in New York and he is scheduled to meet him again later this year in Asia.

In the meantime, Washington state seems to have found a special niche in China, he added.

“They see complementary economies rather than a conflict,” Borich said.

Kristi Heim: 206-464-2718 or