July 27 (Bloomberg) -- The U.S. and China need to “update” their official ties and work together on the global economic crisis, climate change and security, Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner said.

The two countries will discuss these issues in Washington this week to develop a “new framework” for relations between the U.S. and China, Clinton and Geithner said in a joint commentary in the Wall Street Journal. China will be represented in the so-called Strategic and Economic Dialogue by Vice Premier Wang Qishan and State Councilor Dai Bingguo.

“Few global problems can be solved by the U.S. or China alone,” Clinton and Geithner said in the July 26 statement. “And few can be solved without the U.S. and China together. The strength of the global economy, the health of the global environment, the stability of fragile states and the solution to nonproliferation challenges turn in large measure on cooperation between the U.S. and China.”

The summit is the first high-level gathering of its kind since President Barack Obama took office this year, and follows Chinese officials’ concern with U.S. monetary expansion and record budget deficits. At stake is continued demand by China, the largest foreign investor in Treasuries, for the unprecedented issuance of American government debt.

The dollar may be the focus of the talks starting in Washington today as China presses the Obama administration on how it will tame the fiscal deficit and protect the U.S. currency’s value, Morgan Stanley said.

Rebuilding Savings

The biggest priority at the dialogue will be to ensure recovery from the economic crisis and to take steps to ensure “balanced and sustainable growth” in the years ahead, Clinton and Geithner said.

“That will involve Americans rebuilding our savings, strengthening our financial system and investing in energy, education and health care,” they said. “For China it involves continuing financial-sector reform and development. It also involves spurring domestic-demand growth and making the Chinese economy less reliant on exports.”

China needs to raise personal incomes and strengthen social safety nets to encourage its citizens to save less and boost domestic demand, Clinton and Geithner wrote. Both countries must avoid protectionist measures in trade and investment, they said.

Regarding the Copenhagen climate-change conference in December, they said large economies such as China must have “meaningful participation” in any agreement.

The U.S. and China also need to find “complementary approaches” to security and development issues in North Korea, South Asia and Africa, the officials said.

“These strategic-level discussions with our Chinese counterparts will help build trust and relationships to tackle the most vexing global challenges of today and of the coming generation,” Clinton and Geithner said. “We will not always agree on solutions and we must be frank about our differences.”

To contact the reporter on this story: Shamim Adam in Singapore at sadam2@bloomberg.net; Steve McPherson in Tokyo at smcpherson@bloomberg.net

Last Updated: July 26, 2009 23:43 EDT