Obama calls for deeper U.S.-Chinese ties

U.S. and Chinese authorities on Monday began struggling with how and when to withdraw the huge financial incentive spending each have applied for and implement measures to encourage regular long-term growth.

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On the first of two days of economic and political talks, a U.S. delegation including Treasury Secretary Timothy Geithner urged China to increase domestic consumption and Beijing responded with difficult questions about how Washington intends to hold back on its soaring budget deficit.

Behind the so-called strategic economic dialogue and the reality is that the United States and China are two major forces of partial conflicting interests but a common need for a wobbling global economy back to a job-creating growth.

"The relationship between the U.S. and China will shape the 21st century, making it just as important as any bilateral relationship in the world," U.S. President Barack Obama has said. That reality must support our partnership. "

Obama said that the two countries needed to overcome the mutual wariness and deepen cooperation on issues from the global economic crisis to climate change and North Korea.

But he also risked China's displeasure at encouraging them to respect and protect their ethnic and religious minorities - a clear reference to the unrest among the ethnic Uighur and Tibetans in western China and the subsequent attack by Beijing.

The dialogue is broken up Tuesday with a communique in late afternoon, followed by press conferences and comments on an evening at noon Geithner and State Hillary Clinton as Vice Premier Wang Qishan, who leads the Chinese delegation.

Officials said Monday the two sides felt the acute economic crisis in the past two years were lighter, but neither was quite sure, and each expressed strong views about what others will do to help.

Hard road

"The basis for economic stability and turnaround is not fast enough and China's economic aftermath will be a complex and complicated process," warned Chinese Assistant Finance Minister Zhu Guangyao.

"We hope that the U.S. budget deficit is reduced year after year, in line with the objectives of the Obama administration."

U.S. government spending is expected to exceed its income by a staggering $ 1.8 trillion this year, which raises concerns that the dollar value could suffer because of the flood of debt Washington issuer.

At the start of talks Monday neither side referred to the public earlier American efforts to persuade China to let its yuan currency prices faster, but later acknowledged the sensitive issue had been on the table.

"We hope that the yuan / dollar exchange rate remains stable and we are focused on safety of China's investment in the U.S.," Zhu said.

U.S. Treasury coordinator of the talks, David Loevinger, was more cautious.