China Presses U.S. to Stabilize Its Finances

At Issue Is Whether Chinese Assets and Investments Will Be Safe, Official Says

BEIJING, Dec. 4 -- China on Thursday admonished the United States to get its internal financial affairs in order and promised to do its best to pull its own economic weight as the global downturn continues.

Speaking at a high-level economic summit between the two powers, Chinese Vice Premier Wang Qishan urged the United States to "take all necessary measures to stabilize its financial markets and economy as soon as possible and ensure the safety of China's assets and investments in the U.S."

Central Bank Governor Zhou Xiaochuan said that while China is committed to doing its part, it also needs to prepare for the "worst-case scenario," and he pushed the United States to move to increase savings rates as part of a broader program to get its economy back on its feet.

The statements came as the United States and China signed accords on the opening day of the twice-annual U.S.-China Strategic Economic Dialogue. The EcoPartnerships, as they are called, include projects dealing with energy efficiency, hybrid vehicles, clean air and water conservation.

The joint projects involve local governments, businesses, universities and nonprofit groups in both countries. For instance, an earthquake-ravaged town in Sichuan and its tornado-flattened counterpart in Kansas could share methods for sustainable redevelopment, rather than relying on broader national partnerships.

U.S. Treasury Secretary Henry M. Paulson Jr. called the agreements a "powerful model" for how the two countries might work together on similar issues in the future.

Still, the agreements were largely overshadowed by concerns over exchange rate policy and whether China is beginning to reverse course on a commitment to letting its currency appreciate.

Exchange rates had been a primary concern for the United States in the days leading up to the talks, especially after rates dropped Monday by 0.7 percent, the largest margin since the rate was allowed to float more freely in July 2005. But Chinese officials worked to counter the idea that China is intentionally manipulating the yuan to prop up its export market by making its goods cheaper to the rest of the world.

Minister of Commerce Chen Deming stressed that he "wouldn't count on" a falling yuan to help exporters, because the "cause of the current problem with exports is shrinking demand." He said Monday's rate had been adjusted solely on the strength of the dollar.

The yuan closed at 6.8817 against the U.S. dollar Thursday, near a five-month low.

Researcher Liu Songjie contributed to this report.