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China, US set high-level talks

US Treasury Secretary Timothy Geithner concluded his reassurance tour of China yesterday, telling leaders of the country that holds the largest share of America's debt that US President Barack Obama was committed to tackling the soaring budget deficits.

The two nations announced that they would launch revamped high-level talks during the week of July 27, discussions that will not only cover efforts to strengthen economic ties in the midst of a severe global financial crisis but also foreign policy concerns.

The first round of what are scheduled to be annual meetings will take place in Washington with the US delegation led by Geithner and US Secretary of State Hillary Rodham Clinton.

Geithner wrapped up his first visit to China since becoming Treasury secretary with meetings with President Hu Jintao and Premier Win Jiabao.

He told Hu that because of the cooperation already demonstrated by the two countries, there were beginning to be "early signs of stabilization" in the global economy.

"We have already demonstrated the capacity of our two countries to work together on the global stage to lay the foundation for economic recovery," Geithner told Hu.

Hu said he appreciated Geithner's efforts to work with Chinese officials to develop a cooperative approach in tackling the financial crisis.

Wen, in the public part of his meeting with Geithner yesterday, did not mention the comments he had made last March about worries over the rising US budget deficits. China is the largest holder of US Treasury securities.

Wen's comments raised worries that interest rates could suddenly start increasing, perhaps choking off any recovery in the US, and the dollar could start sinking in value if the Chinese started dumping their vast holdings of US debt.

But the reception Geithner received on his trip seemed to show that the two countries were determined to cooperate to deal with the downturn.

"The foremost task for both countries is to work more closely to address the global economic downturn, oppose protectionism in trade and investment, promote reform in international financial system, tighten oversight of international reserve currency so as to ensure the stability and growth of China, the United States and the world," Xinhua news agency quoted Wen as telling Geithner.

Geithner said he had assured Chinese officials that the Obama administration was determined to bring down the size of the deficits once the current crisis has passed.


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