Federal Reserve Chairman Alan Greenspan urged Congress yesterday to find a “less destructive” outlet for its frustration over China’s trade and exchange-rate policies, saying a proposal to slap tariffs on Chinese imports would have “extraordinarily negative” consequences for the world economy.

Amid a growing outcry on Capitol Hill about the tide of Chinese imports flowing into the country, Mr. Greenspan and U.S. Treasury Secretary Snow sought to head off legislation that would impose tariffs of as much as 27.5% on those imports if China fails to change its fixed exchange-rate system within two years. They said they shared Congress’s frustration but asserted higher tariffs would do more harm than good for the international financial system.

“If that ever gets implemented, the consequences, in my judgment, are extraordinarily negative,” Mr. Greenspan told the Senate Finance Committee, referring to a bipartisan bill known as the China Free Trade Act. Congress, he said, should instead consider going to the World Trade Organization to make China honor its pledges to open its markets to international competition.

Mr. Greenspan played down the significance of the trade deficit with China, which reached a record $162 billion at the end of 2004. “The widening of the United States’ bilateral trade deficit with China, measured gross, has been largely in lieu of wider deficits with other Asian economies, including Japan,” he said. “Measured by value added, our bilateral deficits with China would have been far less, and our bilateral deficits with other Asian exporters would have been far more.”

Accordingly, a decision by the Chinese government to revalue its currency would merely “redirect trade within Asia.” He added: “Some observers mistakenly believe that a marked increase in the value of the Chinese renminbi relative to the U.S. dollar would significantly increase manufacturing activity and jobs in the United States. I am aware of no credible evidence that supports such a conclusion.”

Mr. Snow, meanwhile, urged China to change its exchange-rate system quickly to defuse the danger of an international trade war. “It is incumbent on China to address concerns before mounting pressures worldwide to restrict trade harm the openness of the international trading system,” he said. He expressed optimism that China will change the currency system soon, but said the Bush administration will designate China a “currency manipulator” if it doesn’t.

Those admonitions came as Messrs. Greenspan and Snow got an earful from a succession of senators not only about China’s slow progress with trade reforms but also about what they said was the Bush administration’s feeble response. “Is the administration using all of its resources to tackle these problems? No,” said Senator Baucus, a Montana Democrat. “It’s too busy negotiating economically meaningless free-trade agreements with tiny economies.”

Senator Graham, a South Carolina Republican and a co-sponsor of the tariffs bill, cited a “sea change” in Congress’s attitude toward China’s trade policies. “No more saber-rattling; we want results,” said Mr. Graham, whose bill has attracted strong support in the Senate and is expected to come up for a vote this summer. “We’re willing to work [with China], but we’re not going to ignore the problem.”

The Chinese government manages its currency through intervention and a system of capital controls that effectively pegs its currency at 8.28 yuan to the dollar. For nearly two years, the Bush administration has publicly urged China to move to a more flexible system. China’s leaders have said they want to do so, but can only move when the banking system reforms sufficiently to handle the adjustment.