China and the United States on Saturday agreed to establish a dialogue on strategic and economic issues and pledged to work together to tackle the global financial crisis and climate change.

The agreement came out of a flurry of meetings between Chinese leaders and visiting US Secretary of State Hillary Clinton on Saturday.

"Now it is more important than anytime in the past to deepen and develop China-US relations amid the spreading financial crisis and increasing global challenges," Chinese President Hu Jintao told Clinton.

Saying the relations were "among the most important bilateral relations in the world," Hu proposed both countries work closely to address international financial crisis and tackle climate change and other global challenges so as to seek a sound and smooth growth of bilateral ties.

Clinton told Hu she felt like a beginning of "a new era" of bilateral relations characterized by "positive cooperation."

Clinton's visit to Beijing, the last leg of her inaugural overseas trip, marked the beginning of face-to-face diplomacy between the two countries since the Obama administration took office last month.

"This morning I and Foreign Minister Yang Jiechi agreed in principle to a strategic and economic dialogue between our two countries that we will work on with the hope of having you and President Obama formally announce it in London," Clinton said.

The dialogue will be built on the earlier Strategic Economic Dialogue, initiated during the Bush administration.

Another existing senior-level dialogue at vice ministerial level was also incorporated in the new dialogue.

Clinton said she and Treasury Secretary Timothy Geithner will be involved in the fresh mechanism.

"The integration of earlier dialogues into one signaled the Obama administration's intention to fully advance economic, strategic and security ties rather than focus too much on economy," said Zhu Feng, a scholar with Peking University's International Studies School.

"World events have given us a full and formidable agenda," Clinton told the press following the 100-minute talks with her Chinese counterpart on Saturday morning.

"We discussed the matters of bilateral concerns and spent a great deal of time on the array of global problems that both countries face together and we can work together to solve."

One of the key areas both agreed on was to fight the global financial crisis.

"We appreciated the efforts of the US government to stimulate the economy and tackle the financial crisis," Yang said.

Yang said China's 4-trillion-yuan (about US$580) stimulus package would help ensure the growth of China's economy, which is the country's biggest contribution to addressing the global financial crisis.

"Facts proved that both countries had worked very well in dealing with the crisis. We would like to work more closely with the United States."

Clinton said, "We have every reason to believe the United States and China will recover, and together we will help lead the world recovery."

Both confirmed that the two presidents will meet on the sidelines of a G20 summit in London in April, the first since Obama took office last month.

She thanked China for its "continued confidence in US Treasuries."

China replaced Japan as the top holder of US treasury debt last September, with its overall holding hitting US$585 billion, according to US Treasury data.

Yang said China did use foreign exchange reserves to buy US treasury bonds. "We will continue to ensure reserves' safety and liquidity when deciding on the ways and means of deploying the country's about US$2 trillion foreign exchange reserves in the future."

Yang accepted Clinton's invitation to visit the United States in March.

On climate changes, Yang and Clinton agreed to work for a successful Copenhagen conference scheduled for December 2009.

"The cooperation on energy resources and environmental protection is significant to the bilateral ties," Yang said.

Clinton said the US and China will build "an important partnership" to develop clean energy technologies and speed up the transition to a low carbon economy.

Later Saturday, Clinton visited a clean thermal power plant built with General Electric and Chinese technology, which Clinton hailed as "an example of Chinese and American cooperation to produce heat and energy from a new technique that reduce much less emission."

In coincidence with Clinton's visit, Chinese Defense Ministry on Saturday announced both countries would hold an annual mid-level military-to-military meeting later February, a sign of resumed bilateral military ties.

Clinton will also meet with Chinese women representatives and go to church before concluding her week-long Asia trip Sunday noon.

(Xinhua News Agency February 22, 2009)