The Treasury Department (search) announced Thursday the appointment of a special envoy to China, a post that aims to strengthen the Bush administration's efforts to get Beijing to revamp its currency system.

It's the latest in a series of developments advanced by the administration over the past week to intensify pressure on China (search) to change currency and trade practices that critics blame for America's bloated trade deficits.

Treasury Secretary John Snow appointed Olin Wethington (search), 56, as his special envoy on China, a new position that will focus heavily on financial diplomacy with China's economic officials, said department spokesman Tony Fratto.

On Wednesday, the administration announced it was imposing new limits on the amount of clothing that China can ship to the United States, and threatened to brand China a country that manipulates it currency unless it changes its currency policies. If such a designation were made, it could ultimately lead to economic sanctions.

The appointment of Wethington "seeks to continue and intensify a constructive dialogue with China on these issues," said Snow. "This is a critical time for China to implement necessary economic reforms -- most notably, reform of its currency regime and the adoption of market-based exchange policies."

American manufacturers say China's system has undervalued the yuan (search)by as much as 40 percent. The weaker yuan makes Chinese goods cheaper in the United States and American products more expensive in China.

Wethington has been serving as an adviser to Snow, overseeing the United States' economic and financial reconstruction efforts in Afghanistan and Iraq. He will assume his new duties immediately, Fratto said.

U.S.-China trade is a politically sensitive issue for the administration. America's trade deficit with China set a record last year, $162 billion. That was the largest imbalance ever with a single country.

Democrats have accused the president of not doing enough to protect American workers from unfair foreign competition.