WASHINGTON- U.S. Treasury Secretary Timothy Geithner will discuss with top Chinese officials how to boost global economic growth as well as the importance of flexible exchange rates for smoothing imbalances, a senior U.S. Treasury Department official said on Thursday.
Geithner heads for Beijing this weekend and will hold two days of talks on June 1-2 with senior Chinese leaders on a range of issues that may include China's concerns over rising U.S. indebtedness, the official said.
One of the objectives of the trip ... is the importance of laying the foundation for balanced, sustained growth in the future, said the U.S. official who briefed reporters on condition of anonymity.
For China, this involves stronger domestic demand growth, shifting the structure of the domestic economy to serve domestic demand, (and) it's important in bringing these shifts about to have a flexible exchange rate that the Chinese have committed to move toward, the official added.
The visit to China is Geithner's first as U.S. Treasury chief, and will include an address next Monday to students at Peking University, where he once studied Mandarin.
Over the course of the two days, he will meet President Hu Jintao, Premier Wen Jiabao and Vice Premier Wang Qishan among others, and will tell them the Obama administration will try to ratchet down soaring budget deficits as swiftly as possible once a recovery starts.
China is the chief purchaser of U.S. treasury debt securities and has shown some uneasiness about the risk that swelling volumes of U.S. debt could trigger a dollar drop that could shrink the value of China's dollar-denominated holdings.
The U.S. official said China has been an extremely important and stabilizing force in global markets and said it was likely the issue of U.S. debt levels would come up and, if so, the U.S. has an answer.
In general, Treasury believes that by maintaining the deepest, most liquid capital markets in the world and by maintaining strong economic fundamentals, we'll continue to attract both domestic and international investment, the U.S. official said.