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China pushes for stable dollar

CHINA said yesterday it would press Washington at key economic talks next week to protect Chinese assets in the United States by following policies that keep the US dollar stable.

The July 27-28 talks in Washington are the first meeting under the Obama administration of the China-US Strategic and Economic Dialogue.

The Chinese delegation "will make the request that the US side should adopt responsible policies to ensure the basic stability of the exchange rate of the US dollar and protect the safety of Chinese assets in the US," said Zhu Guangyao, an assistant finance minister, at a news briefing in Beijing.

Chinese officials worry that massive US stimulus spending might spark inflation that would erode the value of the dollar and China's holdings of US government debt.

China is the US's single biggest creditor, with US$801.5 billion in Treasury securities, according to the US Treasury Department.

Fed confident

US Federal Reserve Chairman Ben Bernanke said on Tuesday America's central bank was confident it could prevent a flare-up of inflation once a recovery is firmly rooted.

Zhu said China had just received Bernanke's "very important policy testimony" and would give it "very careful study."

The US side in the dialogue will be led by Secretary of State Hillary Rodham Clinton and Treasury Secretary Timothy F. Geithner. The Chinese side is led by Vice Premier Wang Qishan and State Councilor Dai Bingguo.

The two sides would discuss measures to respond to the global financial crisis and revive economic growth, Zhu said. China hoped the meeting would produce agreements to promote trade and oppose protectionism.

"The aim is to send out a positive signal that China and the US are working together to overcome the difficulties at this time," Zhu said.

The two sides also plan to discuss strengthening cooperation in new and renewable energy and conservation, said He Yafei, a deputy foreign minister.

Zhu said China did not expect the issue of the detention of four employees of miner Rio Tinto Ltd on espionage charges to arise in the talks.

Deputy Foreign Minister He said he told Australia's foreign minister, Stephen Smith, at a meeting last week in Egypt that China has "ample evidence" the Rio employees stole state secrets.


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