China and the United States said yesterday they would hold regular high-level talks on their long-term economic relationship.

The new mechanism would commit the two countries to meet twice a year, switching the meetings between capitals, according to Vice Premier Wu Yi and visiting US Secretary of Treasury Henry Paulson.

Wu and Paulson will co-chair the dialogue as special representatives of President Hu Jintao and US President George W. Bush.

Paulson arrived in Beijing yesterday from Hangzhou in Zhejiang Province, continuing a four-day official visit to China, his first in that capacity.

"Given growing economic globalization and increasing bilateral economic relations, a high-level strategic economic dialogue between China and the United States will promote economic cooperation and the growth of China-US relations," the two sides said in an official statement.

Wu said the dialogue was proposed by Bush in a telephone call to Hu last month.

"This fully demonstrates the value that the top leaders of our two countries place on the economic strategic dialogue," she said.

Wu welcomed Paulson as an "old friend of China" in a meeting prior to the announcement.

"Among the senior officials of all governments there must only be a handful who understand China as you do," she said.

Paulson, a former head of investment bank Goldman Sachs, has extensive China experience.

Paulson said his experience in China, which he has visited around 70 times, had taught him how many interests the two countries had in common.

US officials said Paulson, who took over the Treasury in July, had persuaded Cabinet colleagues and Bush that a broader economic dialogue with China was needed.

"The relationship between the US and China is the most important bilateral economic relationship in the world today," Paulson told a news conference yesterday.

Paulson also said that China should further its currency reform when it establishes "a competitive and open financial market system."

"I'm not yet concerned with what technique they use to get flexibility," Paulson said, noting that China could further its currency reform to a definite point when "a competitive and open financial market system" has been established.

Editor: Yan