China recognizes need to shift to more market policies

May 10, 2011, 21:12 GMT

Washington - China increasingly recognizes the need to shift toward a market-based economy if wants to continue to grow in the future, US Treasury Secretary Timothy Geithner said Tuesday.

'They recognize that if China is going to be stronger in the future, they have to increase the role for the market, strengthen the incentives for innovation in China and allow for a more neutral competition,' Geithner said at the conclusion of two days of meetings in Washington between delegations from the two governments.

The United States has continuously pushed China to open up its markets to more imports, better develop its domestic economy to lessen dependence on exports, and to value the yuan based on currency markets rather than government controls.

Geithner noted that Beijing has made progress on all those fronts, but that more needs to be done.

'We have made very, very significant progress in our economic relationship over the past two years,' Geithner said.

The US hosted the two days of strategic dialogue with China that included discussions along a broad range of issues, including cooperating in energy security and technology, stability in the East Asia region and military-to-military talks.

The meetings at the senior levels of government are designed to enhance trust and understanding between the two rivals, who share important interests.

'This is a work in progress,' US Secretary of State Hillary Rodham Clinton said. 'I think that for both of our nations, with such different histories, cultures, experiences, development models, political systems, it is important that we continue intensive consultations.'

Chinese officials said the US has expressed a willingness to open its market to hi-tech products made in China - a long standing Beijing demand.

'We had a good conversation, and that did not mean that we agreed on each and every issue,' Chinese State Councilor Dai Bingguo said through a translator. 'However, after each round of dialogues, we successfully expanded our mutual understanding and increased our mutual trust and enhanced our cooperation.'

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