U.S. will say its economy has ‘fundamentally changed’ in talks with China

A message that the U.S. economy has “fundamentally changed” in the wake of the global financial crisis will headline talks between top U.S. and Chinese officials in Washington, D.C. next week, senior administration officials said Thursday.

The U.S. will emphasize to China that it should redirect its economy to be less dependent on exports to Americans at the annual Strategic and Economic Dialogue meeting in D.C. next week.

Secretary of State Hillary Clinton and Treasury Secretary Tim Geithner will meet with their Chinese counterparts, State Councilor Dai Bingguo and Vice Premier Wang Qishan, respectively. The meetings will be held July 27-28.

“Perhaps the most important message is that there’s been a fundamental change in the U.S. economy,” a senior administration official told reporters in a briefing previewing the meetings. “The U.S. is going to recover, but this is going to be a different recovery from what the Chinese have seen in the past.”

President Obama has spoken in the past about his desire to see the U.S. restructure its economy away from a cyclical, bubble-and-bust model of growth.

“Our message to the Chinese is that if you want to achieve the growth objective, you’re going to have to find a different way to achieve it than exports,” the official said.

Those talks will include issues of monetary policy, including the longstanding practice by the Chinese government to peg its currency to the U.S. dollar.

“The exchange rate is going to certainly be a tool,” an official said, before stressing that the exchange rate between the dollar and yuan would be among a variety of issues included in the talks. There are a lot of factors that affect this trade situation.”

On the part of the State Department, officials said they hope to achieve a “genuine dialogue” with the Chinese during next weeks talks, and will seek to broaden the scope of issues and dialogues on which the U.S. will maintain discussions with the Chinese.