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US treasury chief pursues closer economic ties with China

US Treasury Secretary Timothy Geithner is making best of his first Beijing visit to pursue a closer economic ties with China.

Geithner will spend today in a flurry of meetings with China's top economic team, including Vice Premier Wang Qishan and chiefs of commerce, finance, banking and securities.

"These meetings will give us a chance to discuss the risks and challenges on the economic front, to examine some of the longer term challenges we both face in laying the foundation for a more balanced and sustainable recovery, and to explore our common interest in international financial reform," Geithner said in an economic address at Peking University, where he studied Mandarin in the early 1980s.

In the speech entitled "The United States and China, Cooperating for Recovery and Growth," Geithner lauded bilateral efforts to tackle the economic downturn.

"China and the United States are working together to help shape a strong global strategy to contain the crisis and to lay the foundation for recovery," he told an audience of students, academics and officials.

"These efforts, the combined effect of forceful policy actions here in China, in the United States, and in other major economies, have helped slow the pace of deterioration in growth, repair the financial system, and improve confidence."

Geithner struck a positive note on the global economy, citing the initial signs of improvement.

"The global recession seems to be losing force. In the US, the pace of decline in economic activity has slowed... Households are saving more... Orders for goods and services are somewhat stronger."

Geithner said the US "financial system is starting to heal," listing some signs in banks, securities markets and in credit.

As the world is addressing the immediate financial and economic crisis, Geithner said it was important to lay the foundations for a more balanced, sustained growth of the global economy, which requires substantial changes to economic policy and financial regulation.

"How successful we are in Washington and Beijing will be critically important to the economic fortunes of the rest of the world," he said.

Stressing both countries faced similar domestic challenges, the treasury chief listed reforms in the health care system, education, infrastructure and energy efficiency as essential steps to boosting the production capacity of both economies.

On international financial reform, Geithner said both countries would have chance together to help redesign global standards for capital requirements, stronger oversight of global markets, and better tools for resolving future crises.

Geithner said his country is committed to the ambitious program of the International Financial Fund and other international financial institutions.

He also backed China's bigger role in the international system, saying "a greater role for China is necessary for China, for the effectiveness of international financial institutions and for the world economy".

Geithner also called for cooperation to assure that the global trade and investment environment remains open.

On bilateral economic ties, Geithner said, "In the last few years, the frequency, intensity and importance of US-China economic engagement have multiplied."

He said the US-China Strategic and Economic Dialogue is the next stage in that process.

The new dialogue mechanism came out of the first meeting between President Hu Jintao and President Barack Obama in April in London.

Its strategic track will be chaired by Chinese State Councilor Dai Bingguo and US Secretary of State Hillary Clinton, while its economic track will be chaired by Wang Qishan and Geithner, as special representatives of their respective presidents.

Later today, Geithner will meet with Wang at the Great Hall of the People. Diplomatic sources said their discussion is expected to pave the way for the first China-US Strategic and Economic Dialogue in Washington D.C. this summer.


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