US tells China to look to its own consumers

media captionUS Treasury Secretary Tim Geithner called for a "more open market based economy" in China

US Treasury Secretary Tim Geithner has called on China to rely more on its own spending and less on exports.

"The challenge is to lay the foundation for a new growth model, driven more by domestic demand," he advised his Chinese counterparts.

His comments came at the start of a two-day bilateral summit on security and the economy in Washington.

US officials and many economists say Beijing depends unfairly on a cheap currency to boost exports and growth.

However, Chinese commerce minister, Chen Deming, responded by telling reporters that "the West's fears and worries about China's [yuan] exchange rate are unfounded because over the past three years China's trade surplus has continuously dropped".

The heads of 16 US government agencies and representatives of 20 Chinese government departments will discuss the most difficult issues in a complex, interdependent relationship.

The annual Strategic and Economic Dialogue comes just four months after bilateral discussions between US President Barack Obama and China's President Hu Jintao.

Mr Geithner also said that China should develop "a more market-based economy and a more sophisticated financial system".

In a largely upbeat opening address, he claimed that the two countries' reform needs were "not in conflict".

'Vigorous disagreement'

Meanwhile, at the separate diplomatic track of the twin-track summit, both US Vice-President Joe Biden and Secretary of State Hillary Clinton criticised China's recent clampdown on opposition activists.

"We have vigorous disagreement in the area of human rights," said Mr Biden.

The two pointed out the numerous arrests of activists, journalists and critics by the Chinese government, in an apparent attempt by Beijing to preempt any Egyptian-style protest movement.

It is not thought any concrete results will emerge from this meeting, according to the BBC's Caroline Hepker in New York. Rather, each side is hoping to influence the other's point of view.

"That has meant a string of statements and briefings on issues from the yuan exchange rate to protectionism, America's budget deficit and China's human rights record from leaders on both sides," she said.

"But China makes its own claims of discrimination. Beijing argues the US imposes restrictions on Chinese investment in the US using the cloak of national security concerns."

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