US promise to cut deficit as Chinese raise bonds fears

US Treasury Secretary Timothy Geithner today pledged to cut the country's ballooning deficit as China raised fresh concerns about its $801.5 billion of government bonds.

He said the US will ensure a "sustainable" deficit by 2013 at a meeting of top US and Chinese officials in Washington.

China's assistant finance minister Zh Guangyao said Beijing is "concerned about the security of our financial assets".

In a shift from meetings under the Bush administration, there were few signs of tension over the value of China's yuan which US politicians have labelled artificially cheap to aid Chinese exports.

Both sides also said they saw hopeful signs that the global economy was beginning to move into a period of recovery.

Chinese Vice Premier Wang Qishan said that "at present the world economy is at a critical moment of moving out of crisis and toward recovery".

The US urged China to spend more a home and export less to help restore global growth.

"China's success in shifting the structure of the economy towards domestic-led growth, including a greater role for spending by China's citizens, will be a huge contribution to more rapid, balanced and sustained global growth," said Geithner.