According to a report by China Daily, Obama dispatched his top economic officials - Geithner, Summers, White House budget director Peter Orszag and Federal Reserve Chairman Ben Bernanke - to try to reassure China that the US will not let deficits or inflation jeopardize the value of Chinese investments.

US officials said the president's team told the Chinese that the US was committed to policies that would not fuel inflation.

They stressed that the US has a plan to bring the deficit down once the economic crisis has been resolved. Bernanke, they said, discussed the Fed's exit strategy from the central bank's current period of extraordinary monetary easing, emphasizing it was being careful to guard against future inflation.

China, which has the largest foreign holdings of US Treasury debt at $801.5 billion, has been expressing worries that soaring deficits could spark inflation or a sudden drop in the value of the dollar, thus jeopardizing their investments. Chinese officials said those concerns were raised during the first China-US Strategic and Economic Dialogue held in Washington on July 27 and 28.

By People's Daily Online