U.S.: China Needed for Economic Recovery

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President Obama is urging the U.S. and China to cooperate to lift the global economy out of a recessions, on the second day of high level economic talks between the two countries.
 
The two sides have not seen eye to eye on certain trade issues and the U.S. budget deficit.
 
But Obama emphasized that a mutually beneficial relationship is critical to the global economic recovery.

"As Americans save more and Chinese are able to spend more, we can put growth on a more sustainable foundation," Obama said. "Because just as China has benefited from substantial investment and profitable exports, China can also be an enormous market for American goods."

Click play for more on this week's meetings with Gordan Chang, author of The Coming Collapse of China and Forbes magazine columnist.

China is concerned that America's soaring budget deficit will threaten the value of the dollar.

Obama's top economic advisors have been talking to China's top economic officials. Treasury Secretary Timothy Geithner, National Economic Council Director Lawrence Summers, White House budget director Peter Orszag and Federal Reserve Chairman Ben Bernanke, are all working to reassure China that the U.S. will not let deficits or inflation jeopardize the value of Chinese investments.

The Chinese have the largest foreign holdings of U.S. treasury debt: more than $801 billion.

Economists say the Chinese are right to worry about a U.S. deficit that's projected to hit $1.85 trillion this year, four times the previous record.

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