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China is a source of both economic opportunities and significant concerns for U.S. officials, Treasury Secretary Timothy Geithner said Wednesday, highlighting the tensions that will be the centerpiece of Chinese President Hu Jintao’s visit to Washington next week.
Geithner, in a statement that could presage discussions between presidents Hu and Barack Obama, said Beijing must do more to address U.S. complaints about intellectual property theft and the undervaluation of the yuan if China is to be given greater access to investment and technology opportunities in the U.S.

“We are willing to make progress on these issues, but our ability to move on these issues will depend of course on how much progress we see from China,” Geithner said in a speech.

He noted that President Hu’s visit to the White House comes at a time of “important transition” for the world economy. The recent financial crisis has left many developed economies in flux, while emerging economies like China are at the beginning of what he described as a “long period of very rapid economic growth.”

The U.S., Geithner continued, lies somewhere in between those two paths. While the U.S. economy should grow about twice the rate of Europe and Japan, that growth will be about half of that experienced by major emerging economies.

“These dynamics will fundamentally change the balance in the world economy, forcing changes in the architecture of the trade and financial systems,” Geithner said.

U.S. officials have aggressively pushed countries like China, India and Brazil to focus more on domestic growth, warning that a reliance on the U.S. consumer to drive growth in their countries is unsustainable. But this rebalancing effort has been met with mixed reaction abroad, and in the case of China a key issue is the government’s practice of managing the value of the yuan.

Geithner and other U.S. officials have stressed the need for Beijing to allow the currency to appreciate, and since the middle of last year the yuan has been allowed to appreciate. But the increase to date is not enough, Geithner warned, suggesting that the current effort by Beijing to combat high inflation in China could be aided by allowing greater appreciation.

“We believe it is in China’s interest to allow the currency to appreciate more rapidly in response to market forces,” Geithner said. “And we believe China will do so because the alternative will be too costly–for China and for China’s relations with the rest of the world.”

Despite the warnings, Geithner also sought to offer a conciliatory tone ahead of next week’s meetings in Washington. Even though the two countries are direct competitors, “our economic strengths are largely complementary,” he said. He also stressed that it is the policies pursued by U.S. policy makers, not Chinese officials, that will have the greatest effect on the U.S. economy.

“In any discussion of China, I think it is important for Americans to understand the solutions to our challenges in the United States rest first and foremost in the policies of Washington, not of Beijing,” Geithner said.