The Bush administration says it is pursuing a strategy of diplomatic engagement with China that offers the best hope of opening China's market to more America exports and narrowing the huge trade gap between the two countries.

But critics are harshly accusing the administration of selling out American workers by refusing to pursue allegations that China (search) is gaining unfair trade advantages by violating Chinese workers' rights and manipulating its currency.

Presumptive Democratic presidential nominee Sen. John Kerry (search), hoping to capitalize on Americans' anxiety about the loss of jobs to overseas competition, said that when it comes to China "the administration is all talk and no action."

He pledged in a statement Wednesday that if elected president, "I am going to fight to keep U.S. jobs in America and I'm not going to sit idly by when China or any other country pursues policies that hurt our economy."

The official Xinhua News Agency carried word of Washington's announcement but no comment in response. China's Trade Ministry had no comment, a spokeswoman said, and the Labor and Social Security Ministry said it was unaware of the report.

On Thursday, a group of Democratic senators and House members introduced legislation to reinstate a "Super 301" provision in U.S. trade law that would require the administration to make an annual report to Congress on the most onerous unfair trade practices and launch negotiations to remove those barriers. If negotiations failed, the United States could pursue trade sanctions.

The legislation, being sponsored by Sens. Jon Corzine, D-N.J., and Max Baucus, D-Mont., and in the House by Reps. Charles Rangel, D-N.Y., and Sander Levin, D-Mich., is similar to a proposal Kerry put forward in a speech Monday attacking Bush's policies on trade.

Last month, the AFL-CIO (search) had petitioned the administration to launch an investigation over its claims of widespread abuse of Chinese workers' rights. John Sweeney, president of the AFL-CIO, had said the administration's refusal to take up the case "is an outrage and an insult to American and Chinese workers."

The AFL-CIO petition contended that China's abuse of worker rights amounted to an unfair trade practice under U.S. trade laws that had given China a wage advantage of between 47 percent and 86 percent and had cost the loss of an estimated 727,000 U.S. factory jobs.

U.S. Trade Representative (search) Robert Zoellick told a news conference Wednesday that the question wasn't whether the administration approved or disapproved of Chinese policies but how was the best way to get the country to make changes.

"Accepting these petitions would take us down the path of economic isolationism," Zoellick said. "That is a path we will not take."

The decision drew criticism from Democrats in Congress and even some Republicans who represent states where manufacturing job losses have been high.

"I'm very disappointed by the administration's soft approach to China," said Sen. George Voinovich, R-Ohio. "Unless we get tough with a regime bent on stealing our technology and stealing our jobs, there won't be an American manufacturing sector."

Rep. Marty Meehan of Massachusetts, one of 27 Democrats who had written Bush on Wednesday urging him to accept the AFL-CIO petition, said the administration's action went against the findings of its own State Department, which annually cites China for human rights abuses.

"I don't know how anyone can say with a straight face that China doesn't break internationally recognized labor standards," Meehan said.

Rep. Sander Levin, D-Mich., said the presentation by four Cabinet-level officials was "a smokescreen to hide their do-little approach to China trade" which has seen America's trade deficit with China hit a record $124 billion last year.

Some business groups praised the decision, saying the administration had exhibited political courage in choosing continued diplomatic engagement over confrontation, especially in an election year when outsourcing and job losses in general had become hot issues.

"I applaud the administration for making the appropriate economic and trade decisions in a difficult political situation," said U.S. Chamber of Commerce President Thomas Donahue.

But Frank Vargo, vice president for international affairs at the National Association of Manufacturers (search), one of the groups leading the effort to bring a case against China's currency policy, said he believed the administration would have been more successful in bringing pressure on China if it were actively pursuing an investigation into China's currency policy.