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China strikes conciliatory note over currency fears

CHINA struck a conciliatory note in talks with the United States yesterday.

It vowed to spur domestic demand and keep a guarded opening to exchange rate reform, which the Obama administration says is needed to rebalance the global economy.

The US treaded softly on the subject and welcomed Beijing’s long-standing pledge to reform the yuan as the two sides opened their second Strategic and Economic Dialogue.

But both countries also made clear that a stronger Chinese currency was not enough by itself to narrow the whopping US bilateral trade deficit that has fueled tensions between them at a time when the global economic recovery remains fragile.

While Chinese President Hu Jintao broke no new ground on the yuan dispute, he set an amicable tone for the two days of talks during which the world’s biggest and third-biggest economies will seek to steady their relations.