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TOKYO, Nov 10 (Reuters) - U.S. Treasury Secretary Timothy Geithner on Tuesday told his Japanese counterpart that a commitment by Tokyo to rely less on exports and more on domestic consumption to power growth will benefit the global economy.
According to a senior U.S. Treasury official who spoke to reporters from Singapore, Geithner told Japanese Finance Minister Hirohisa Fujii at a dinner meeting that he welcomed a commitment by Japan to "shift its economy away from exports toward demand-led growth."
Geithner was on his first trip to Japan as U.S. Treasury chief and is continuing a drive to get Asian countries, including China, to do more to spur their own economies through encouraging consumption in a bid to get global trade flows into better balance.
He arrived in Tokyo late on Tuesday afternoon and will spend much of Wednesday meeting top Japanese officials, including Prime Minister Yukio Hatoyama, before flying on to Singapore for sessions on Thursday of the Asia Pacific Economic Cooperation Forum, or APEC.
In response to questions, the U.S. official, who spoke on condition of anonymity, said China also had a role to play by exporting less while countries like the United States begin to save more and suggested a more flexible currency would help.
"I think first I'll say we welcome the commitment to move to a more flexible exchange rate over time," the U.S. official said. "Flexible prices, flexible exchange rates are an important part of the process for rebalancing and are important for China."
China on Tuesday restated its long-standing policy to maintain the basic stability of the yuan at a reasonable and balanced level. Foreign Ministry spokesman Qin Gang said China would keep improving the currency's exchange rate mechanism with a view to gradually making the yuan more flexible.
Qin added that China hoped the United States, as the most important economy in the world, would pursue a stable fiscal policy to keep the dollar's exchange rate steady and ensure its own growth and that of other nations.
The U.S. official said high U.S. unemployment underlined the "continued severity" of economic conditions and said that it was important for all nations to keep economic stimulus measures in place as long as needed to sustain economic recovery.
(additional reporting by David Lawder in Washington)
(Reporting by Glenn Somerville; Editing by Victoria Main)