President Bush has pressed China on its human rights record, calling on Beijing to allow the freedom of assembly, speech and worship.
Mr. Bush noted China had grown strong because its citizens have the freedom to buy and sell. He added it could be even more successful if the government allowed the Chinese people those other freedoms.
He was speaking Thursday, at a White House welcoming ceremony for Chinese President Hu Jintao, before hosting him for talks.
A heckler in an area reserved for the press shouted out as Mr. Hu gave his remarks. She was escorted out by security officers.
Mr. Bush also reaffirmed Washington's one-China policy, and urged Taipei and Beijing to avoid confrontation on the status of Taiwan.
Mr. Hu said China is ready to continue to work with the U.S. side and other parties to peacefully resolve the nuclear issues regarding North Korea and Iran.
Outside the White House gates, several hundred people gathered to protest China's human rights record, but some waved banners in support of Mr. Hu.
Washington also is pressuring China to revalue its currency and reduce its trade surplus with the United States - which was more than $200 billion in 2005.
On Wednesday, in the northwestern U.S. state of Washington, Mr. Hu said China wants to make foreign exchange markets more efficient, but is not yet ready to make a drastic change in the value of its currency.
He is scheduled to deliver a major policy speech Friday at Yale, a top U.S. university in the northeastern state of Connecticut.