Geithner To China: U.S. Will Cut Deficit

Treasury Secretary Timothy Geithner says he has reassured China that the United States will take steps to address rising budget deficits once the economic recovery is firmly in place.

China has huge investments in the United States and has worried it could be undermined by U.S. budget deficits. Geithner says the Obama administration plans to reverse the spending of hundreds of billions of dollars devoted to stimulating the economy and propping up a teetering financial system.

Geithner spoke at a news conference Tuesday capping two-days of high-level talks between Chinese envoys and U.S. officials.

Geithner says the Chinese agreed to take steps to increase domestic consumption of its products.

"Our two nations are committed to a strong and stable international financial system that will contribute to more stable, balanced growth globally," Geithner said earlier in the day, as he and top Chinese economic officials resumed discussions on a variety of economic issues.

In his opening comments, Chinese Vice Premier Wang Qishan voiced support for a key U.S. goal that China shift to more domestic-led growth rather than depending so much on exports that drive up the U.S. trade deficit.

"China will focus on boosting domestic demand and in particular consumer demand," Wang said, speaking through a translator. He and Geithner sat at the head of a long conference table set up underneath massive chandeliers in Treasury's ornate Cash Room.

Geithner was accompanied by National Economic Council Director Lawrence Summers and U.S. Trade Representative Ron Kirk while the Chinese team included Zhou Xiaochuan, head of the Bank of China.