China Seeks Assurances That U.S. Will Cut Its Deficit

“Attention should be given to the fiscal deficit,” said Xie Xuren, the Chinese finance minister. Treasury Secretary Timothy F. Geithner assured the Chinese that once the economy rebounded, the deficit would gradually come down from its current record levels.

For China, the rising American deficit is a concern because it could weaken the dollar and put at risk China’s vast holdings of Treasury securities and other dollar-based assets. China holds an estimated $1.5 trillion in such securities, making it the United States’ largest foreign creditor. -- New York Times