The deal comes as booming demand for energy in China is seen as a key element in rising global energy prices and as China's energy demand is expected to continue on its robust upward path, US officials said.

"The US and China are the largest present and projected consumers of petroleum and its largest importers," Mark Maddox, US deputy assistant secretary of energy.

China and the US are also the largest consumers of electric power with a combined increase in demand over the next 20 years likely to exceed the total amount of electric power now generated by any nation, including the US, he said.

Both nations rely heavily on coal burning.

This agreement "signifies to the world that we are jointly committed to a constructive search for real-rather-than-symbolic answers to the rising global concerns about the interlocked problems of economic growth, energy use and environmental dangers," Maddox said.

The United States had a wide range of clean fuel technologies that could help China cut carbon emissions and increase energy efficiency, he said.

Signing the agreement for the Chinese side was Ma Songde, Vice Minister of Science and Technology.

Cooperation includes introducing the integrated-gasification-combined-cycle (IGCC) clean coal burning technology from the US, with the US giant General Electric now in talks with a Chinese partner to set up a commercial IGCC plant, a senior US official said.

If the plant can be built, it would offer China a significantly cleaner and environmentally friendly technology, but the cost for such plants could be prohibitive, he said.

"The Chinese perspective is that they are still looking at raw generation numbers and how to apply that power at the lowest costs," the official said.

"There seems to be some begrudging understandings that they need to do it cleaner, (but) they are on a very tight budget and their priority is still to produce the next megawatt as soon as and as cheaply as they can."

Such an energy policy has resulted in growing pollution throughout China, including worsening air pollution, acid rain and increasing emissions of greenhouse gases that lead to global warming.

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