United States Deputy Treasury Secretary Lawrence Summers says Indonesia must make more progress on economic reforms if it wants to see a swift return of investor confidence. 'There has been some progress in the past months [but] it's essential to make better progress,' Mr Summers said after meeting Indonesian President B.J. Habibie. He said Indonesia must not underestimate 'the importance the international community attaches to the conduct of June elections'. The elections are 'a key factor to instil greater confidence in Indonesia's economic future and restore the potential for rapid economic growth', Mr Summers said. After leaving Indonesia, he is due to arrive in Beijing today to meet top economic officials to discuss the reform of the mainland's banks and state companies, the World Trade Organisation and other policy issues. Mr Summers will meet Premier Zhu Rongji, central bank governor Dai Xianglong and Finance Minister Xiang Huaicheng. His trip comes a week before the arrival of US Secretary of State Madeleine Albright and Trade Representative Charlene Barshefsky. The visits are in preparation for Mr Zhu's visit to the US in April, the last big opportunity for Beijing to negotiate a deal on entering the WTO. 'The mood in Washington toward China is not positive,' one diplomatic source said. 'This year will not be fruitful for bilateral relations. My expectations are not high.' Mr Summers is expected to raise the WTO issue in broad policy terms with Mr Zhu, but not negotiate the details, which will be handled by Ms Barshefsky in the last big push before his visit. Ms Barshefsky's last attempt, four weeks before US President Bill Clinton's summit in June, ended in failure because the gap between the two sides remained too large and Mr Clinton and President Jiang Zemin were unable to sign an agreement on the WTO during the visit. Mr Summers also wants to gauge the progress of reforms at state companies and banks and be reassured they have not been slowed down or stopped by the weakened growth of the economy and the rising unemployment that has resulted from it. Another issue likely to be discussed is the level of the yen. Last year, Beijing criticised Japan for doing too little to stimulate its domestic economy and help Asia out of its crisis and for allowing the yen to fall too low, thereby helping make Japan's trade surplus one of the highest on record. Beijing wants a high, stable yen. It is not known if it had used some of its US$145 billion in reserves, the second highest in the world, in the foreign exchange market to push up the yen. Mr Summers is likely to praise the mainland for maintaining the value of the yuan and to encourage it to continue doing so. On entry into the WTO, the clock is ticking because a new round of talks are due to begin in December. 'It will be hard to get a deal,' the source said. 'If Zhu does not bring an offer to the table in April, it will be hard to keep the momentum going in the negotiations.' Talks have failed because Beijing cannot accept the terms demanded by WTO members, especially the US, and insists it should be treated as a developing country. With social stability a priority, the domestic slowdown has further reduced the negotiating room for the Chinese side - which faces strong industry opposition to plans to allow more access to foreign competitors at a time of rising unemployment and fear of unrest in a year full of sensitive anniversaries.