Geithner's trip reassures China

BEIJING, June 3 (UPI) -- Chinese President Hu Jintao, apparently reassured by U.S. Treasury Secretary Tim Geithner's visit, said the nations' ties are headed in the right direction.

Geithner's maiden trip to the country, which has become the largest creditor to the United States, was designed to calm concerns among some Chinese experts about the safety of China's holdings of U.S. treasuries because of growing U.S. deficits and the depreciation of the dollar.

"China-U.S. relations show a good momentum of development as both sides have kept close contacts since the new U.S. administration took office," Xinhua reported Hu as saying in his meeting with Geithner Tuesday.

During his visit, Geithner said the global economy was showing signs of improvement and that in the United States the pace of the decline in economic activity had slowed and the U.S. financial system was starting to heal.

While assuring China's U.S. debt holdings are "very safe," Geithner in a speech at Peking University was quoted as saying, "We have the deepest, most liquid" markets for Treasury securities in the world.

The Xinhua report said both countries were stepping up efforts to prepare for the China-U.S. Strategic and Economic Dialogue in July in Washington.

China Daily reported Geithner appeared to have won some backing from China with top leaders saying the two countries have set a good example in working together toward a quick recovery of the global economy.

Geithner said his visit was "a good start" and lauded the bilateral "capacity to work together (on a) global stage," Xinhua reported.

Chinese Vice Premier Wang Qishanand, who led his country's top economic team in talks with Geithner, said his country "will send a message that China and the United States are cooperating substantively to get over the difficult times, which will help boost confidence, promote global financial stability and economic recovery."