Geithner, who earlier this year described China as a currency manipulator, also used a speech at Peking University to urge his hosts to allow a more flexible exchange rate.

"China and the United States individually, and together, are so important in the global economy and financial system that what we do has a direct impact on the stability and strength of the international economic system," he said.

"Global problems will not be solved without US-China cooperation. That goes for the entire range of issues that face our world, from economic recovery and financial repair to climate change and energy policy."

Geithner later held talks with China's Vice Premier for economic affairs, Wang Qishan, and will meet President Hu Jintao and Prime Minister Wen Jiabao on Tuesday.

While praising Beijing's strategy to stimulate domestic demand and overcome the global financial crisis, he urged China to deepen the reform of its currency regime.

"An important part of this strategy is the government's commitment to continue progress toward a more flexible exchange rate regime," Geithner said, according to a text of his speech.

"Greater exchange rate flexibility will help reinforce the shift in the composition of growth, encourage resource shifts to support domestic demand, and provide greater ability for monetary policy to achieve sustained growth with low inflation in the future."

Geithner triggered anger in Beijing in January when he said in a written reply to a senator during a confirmation hearing that US President Barack Obama "believes that China is manipulating its currency."

In April, Obama's administration said China had not manipulated its currency to snare a competitive advantage, but insisted that the yuan remained undervalued.

While answering questions following his speech, Geithner said Beijing's massive US bond holdings were "very safe," while reiterating the US desire to maintain a strong dollar.

Such issues are expected to be the focus of his talks with Chinese leaders, who have expressed concerns over the safety of China's nearly 800 billion dollars in US bonds amid a rising US budget deficit.

"As we recover from this unprecedented crisis, we will cut our fiscal deficit (and) we will eliminate the extraordinary governmental support that we have put in place to overcome the crisis," Geithner said in the speech.

Thanks to its export-oriented economy, China has built up the world's largest forex reserves -- amounting to nearly two trillion dollars -- with much of it coming from huge surpluses with the United States.

The enormous reserves have also made Beijing the biggest holder of US treasury bonds that are crucial to Washington's efforts to kick-start its economy.

In his speech, Geithner noted "initial signs of improvement" in the US economy and said his country's "financial system is starting to heal."

He also urged Beijing to open its markets to US imports and investment.

"I will be a strong advocate for US interests, just as I expect my counterparts to represent China's," he said at the university where he studied Chinese in the early 1980s.

"China has benefited hugely from open trade and investment, and the ability to greatly increase its exports to the rest of the world. In turn, we expect increased opportunities to export to and invest in the Chinese economy."

He also said the United States was prepared to support a larger role for China in the international system.

"China is already too important to the global economy not to have a full seat at the international table," he said.

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