(Adds quotes from Chinese officials, background)
By Chris Buckley
PITTSBURGH, Sept 24 (Reuters) - China pressed its worries about the stability of the U.S. dollar on Thursday, deflecting criticism of its own currency and trade policies as G20 leaders met to discuss issues including rebalancing the global economy.
Given the U.S. dollar's role as the world's primary reserve currency, the Obama administration should not risk letting it falter, a Chinese central bank official told a news conference.
"The stability of the U.S. dollar has a keen influence on world economic recovery," and U.S. policy on the dollar should heed both domestic and international needs, said Xie Duo, director-general of the international department of the People's Bank of China, the nation's central bank.
"We've constantly stressed to the U.S. government that we hope that in carrying out domestic currency policy and the role (of the dollar) as an international reserve currency, it should take care of both of those two policy dimensions," Xie said.
Washington should bear in mind the importance of the dollar as a global reserve currency when setting domestic fiscal policy, said Xie.
Speaking to reporters in Pittsburgh earlier, U.S. Treasury Secretary Timothy Geithner addressed such worries, saying the dollar would retain its role as the world's primary reserve currency for "a very long time." [ID:nWEN4028]
Xie and other officials were speaking ahead of a day of talks at which the G20 leaders were to discuss ways of avoiding a repeat of the financial crisis, including a possible exit plan from the burst of stimulus injected to help the global economy recover.
The leaders were also to discuss global economic imbalances that economists fear could undermine a recovery.
Some economists and Western officials have said China, with exchange rate controls on its yuan currency that makes Chinese exports cheaper overseas and so enables the country to accumulate a huge trade surplus, is an important element in those imbalances.
China has invested much of the ensuing currency reserves in U.S. Treasury securities, becoming the world's single biggest holder of them and watching uneasily as Washington spends lavishly to haul the U.S. economy out of recession.
Chinese officials staking out their position for the summit turned their attention on the fiscal and trade policies of Washington.
The main global economic imbalance that should worry the G20 is the gap between rich and poor nations, Zheng Xiaosong of the Chinese Ministry of Finance, told the news conference.
Ma Xin, an official in the National Development and Reform Commission that steers Chinese economic policy, said his government wanted the summit to begin studying how to wind down the "extraordinary" government spending initiatives that have shored up economic activity in the wake of the financial crisis.
He also said it was too early to abandon this stimulus spending, although inflationary risks and other worries would eventually demand attention and require a retreat.
"We think it's too early to exit yet, because Europe, the United States and Japan are still in negative growth....Pulling out now would damage global economic confidence," Ma told Reuters after a news conference in Pittsburgh, host of the G20 summit of major rich and developing economies.
But, Ma added, "We need to consider making a plan for, or studying, this (exit)...This can't continue for a very long time. Now is a bit early, but we need to exit eventually."
Washington and Beijing have also been at odds over Chinese exports, following President Obama's decision to impose extra tariffs on Chinese-made tires.
Obama imposed the tire tariffs under an anti-import surge mechanism, which Beijing fears the safeguard rule could be used against other Chinese-made products. [ID:nPEK11639]
"China is the biggest victim of protectionism," Yu Jianhua, a an international trade official with the Chinese Ministry of Commerce, told the news conference.
(Additional reporting by Paul Eckert; Editing by Chizu Nomiyama)