China tells US to put own house in order; promises help to stabilise global economy

China's chief trade envoy has urged the US to "do all it can" to stabilise its economy, amid a global financial crisis. The call came on the first of two days of regular, high-level Sino-American meetings.

Chinese Vice Premier Wang Qishan opened the two-day Strategic Economic Dialogue in Beijing by calling for the US to stabilize its own economy. He also urged Washington to protect Chinese investments in the US. These comments came as US Treasury Secretary Henry Paulson praised China's ''responsible role'' in combating the crisis.

He said that the US and China will work together to strengthen the global economic system. He added that there is potential for cooperation in many fields.

"We will continue to work on strategies for managing macro-economic risks and promoting balanced growth, on open investment and trade policies, including strengthening product, food and drug safety; on our respective roles in international institutions; and to strengthen cooperation in energy and the environment," said Paulson.

Speaking earlier as Paulson listened, Wang appealed to Washington to "take the necessary measures to stabilise the economy and financial markets, as well as to guarantee the safety of China's assets and investments in the United States."

Wang did not elaborate, but Beijing owns $585 billion in Treasury debt that has helped to finance US budget deficits, and a weak dollar and financial turmoil have fueled Chinese anxiety about such investments.

The unusual Chinese appeal highlighted the close links between the world's largest and fourth-largest economies and the global importance of their ability to keep relations smooth. But in unusually pointed language, China's central bank governor, Zhou Xiaochuan, blamed the crisis on US financial excesses and said they should be fixed.

"The important reasons for the US financial crisis include excessive consumption and high leverage," Zhou said in a speech to the meeting, according to Jin Qi, a central bank official who briefed reporters. "The United States should speed up domestic adjustment, raise its savings rate and reduce its trade and fiscal deficits."

The two sides highlighted areas of agreement at the talks. The discussions will yield ''substantive agreements'' on electricity generation, transportation, and environmental cooperation, Paulson said. China is seeking more energy- efficient technology. Wang said there had been ''positive progress'' on an accord to facilitate investment by Chinese and US companies in each other's assets.

US officials said the Chinese side promised more currency reforms. Washington and other trading partners say China's yuan is kept undervalued, giving its exporters an unfair price advantage and adding to its trade surplus. Some American lawmakers are calling for punitive action against Beijing.

Wang headed the Chinese delegation, which also included the ministers of finance, development and reform, agriculture, labour, commerce, health, environment and the central bank. Paulson led the American delegation, which included secretaries of agriculture, labour and health, the US trade representative, officials of the Treasury and Commerce departments, and others. 

The twice-a-year meeting started in 2006, and represents the highest-level talks between two of the world's leading economies. Chinese media say Chinese President Hu Jintao and Premier Wen Jiabao are expected to meet with the American delegation on Friday.