WASHINGTON - The United States will continue to push for financial reform during talks with Chinese senior officials next week, US Treasury Secretary Timothy Geithner said on Tuesday.

On May 9-10, Chinese Vice-Premier Wang Qishan and State Councilor Dai Bingguo will co-chair the third round of the Strategic and Economic Dialogue (S&ED) with their respective US counterparts, Geithner and Secretary of State Hillary Clinton.

Related: Geithner says US is making financial progress on debt

US treasury secretary Timothy Geithner speaks at a media briefing with the US-China Business Council in Washington May 3, 2011. [Agencies]

Though the US continues to ask for a faster appreciation of Chinese currency, renminbi, it sees a comprehensive financial reform in China will have more far-reaching effect on the bilateral economic ties.

Geithner said during a news conference with the US-China Business Council that if China wants to provide balanced growth, it must improve its financial system, open up its capital market and level the playing fields for all players, including foreign firms.

"Through the S&ED, we are encouraging China to allow markets to determine interest rates and the allocation of credit, to develop a more diversified financial system, with deeper bond and equity markets, and to make it easier for foreigners to make portfolio investment in China and for Chinese citizens to make portfolio investment abroad," he said.

"China recognizes that is a fundamental part of its next Five-Year Plan (2011-2015), and we've got interest in moving in that direction," he said.

In the previous meetings, Washington focused on Chinese currency exchange rate, intellectual property rights protection and access to Chinese markets. China discussed the US granting China the market economy status, Chinese companies' investment opportunities and relaxation on the US technology export control.

Geithner said that the current system, which favors China's State-owned enterprises, makes it tough for foreign companies to compete in China and adds tension among its trade partners.

The US wants to see a "more fair and efficient allocation of credit and capital" in China, he said.

The annual meeting was initiated by Chinese President Hu Jintao and his US counterpart, Barack Obama, on the sidelines of the G20 financial summit in London in April 2009.

It is the highest-level of discussions between the world's two major powers on a broad range of strategic and economic issues.

Geithner praised China for making progress in adjusting its exchange rate, relaxing its control on the movement of funds, transforming its economy to reduce trade imbalances and leveling the commercial playing field for foreign companies.

"Together, these steps have helped expand opportunities for US producers in China," he said.

"These changes in policy directions offer the prospect of much more substantial economic gains for US companies and workers in the future, provided we see durable changes in actual policies on the ground."

Since June, the renminbi has appreciated against the dollar by more than 5 percent. On Friday, the yuan breezed past 6.5 per dollar, the record since 1993.

China Daily

(China Daily 05/04/2011 page1)