Geithner tried to reassure his Chinese counterparts that the federal budget deficit would not be allowed to expand out of control.

From Marketwatch.com

China's central bank holds an estimated $1.2 trillion worth of U.S. dollar assets.

In his opening remarks, Treasury Secretary Timothy Geithner tried to reassure his Chinese counterparts that the federal budget deficit would not be allowed to expand out of control.

"Already savings are up and our external deficit has fallen, and we are committed to taking measures to maintaining greater personal saving and to reducing the federal deficit to a sustainable level by 2013," Geithner said.

Chinese officials have unanimously criticized the buildup in the U.S. deficit and the Federal Reserve's expansionary monetary policy.

Fed chief Ben Bernanke said on Sunday that Fed policy is aimed at maintaining a strong U.S. currency.

Analysts said the talks might make progress is expanding China's role at the International Monetary Fund.

From the U.S. perspective, one goal of the discussions is to open up Chinese consumer markets to U.S. exports.

"China's success in shifting the structure of the economy towards domestic-led growth, including a greater role for spending by China's citizens, will be a huge contribution to more rapid, balanced and sustained global growth," Geithner said.