Chinese Blame U.S. Policies for Financial Crisis During Economic Talks

Top U.S. and Chinese finance officials are meeting Thursday and Friday in Beijing to discuss actions that each country ought to take to ease the global economic crisis—the latest in a series of U.S.-Chinese gatherings dubbed the Strategic Economic Dialogue and meant to encourage coordination between the world's first- and fourth-largest economies.

Chinese officials were unusually blunt as the session opened. China's central bank governor, Zhou Xiaochuan, blamed "the U.S. financial crisis" on "excessive consumption and high leverage," telling the U.S. delegation that Washington needed to "raise its savings rate and reduce its trade and fiscal deficits."

In general, U.S. economic officials are more accustomed to giving those sorts of lectures than receiving them. The top American at the talks is Treasury Secretary Henry Paulson, President Bush's point person in the financial crisis.

At the same time, Chinese officials said they would continue with currency reform—in essence, allowing the undervalued Chinese yuan to rise. The yuan has climbed about 20 percent against the U.S. dollar in the past 3½ years—in reaction to U.S. and western political pressure.

An undervalued currency gives Chinese exporters of manufactured goods a price advantage in selling to the American market, and the issue has caught the attention of President-elect Barack Obama and many lawmakers on Capitol Hill.

• Read about how China will test the Obama administration.