U.S. Treasury Secretary Timothy F. Geithner pressed China on Thursday to speed reform of its state-dominated banking system, citing it as one of the chief ways the country gains an unfair trade advantage.

Ahead of talks in Beijing next week, Geithner said there had been “significant progress” on several economic fronts, including a rise in the value of China’s currency, a run-up in U.S. exports to China, and a gradual opening of China’s economy to outside companies.

But in remarks at San Francisco’s Commonwealth Club, Geithner said fundamental problems remain. China’s use of its financial system to steer credit and other advantages to state-owned companies is chief among them.

“Channeling resources into large state enterprises, while many of China’s most dynamic private firms are starved for credit, ultimately hurts China’s economy,” Geithner said. “It also hurts U.S. companies and workers who compete with these firms.”

“If China’s state enterprises want to be treated like commercial enterprises by the rest of the world, they need to act more like commercial enterprises.”

Geithner and Secretary of State Hillary Rodham Clinton are set to travel to China next week for the latest in a yearly set of strategic and economic talks begun four years ago to build better relations between what are now the world’s two largest economies.

The talks come in the midst of both a U.S. presidential election and a leadership transition in China that U.S. officials hope will usher in more progress.

U.S. businesses are watching as well. Banks, insurers and other financial service companies are eager for China’s financial sector to be opened more to outside competition, and a coalition of them wrote Geithner this week urging that financial reform be a priority.

Geithner has emphasized in recent speeches that he feels China’s leaders are making steady progress; for instance, by letting their currency rise in value and expanding the ways in which investors can move money into and out of the country. China pegs the exchange rate between its renminbi and the dollar at a level the United States considers below market value, providing an advantage for Chinese exporters. The country’s use of strict controls on the movement of capital is part of that system.

In San Francisco, Geithner cited complaints from U.S. businesses about problems with access to the Chinese market and intellectual-property protection. He also noted basic problems he sees in the structure of China’s financial system.

The regulation of interest rates and the influence of state-owned banks in effect funnels wealth away from Chinese households and lets the country underwrite the activities of state-owned companies. China has pledged to try to boost consumption by improving household incomes — a change expected to further its appetite for imports from the United States and elsewhere. Geithner said financial reform would be an important step in this direction.

The current system “limits consumption and starves China’s most innovative private firms and sectors of capital,” Geithner said. “Financial sector reforms are critical to China’s growth — and that growth in turn represents tremendous opportunity for American companies and workers.”