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U.S. Treasury Secretary Timothy Geithner, while here in Beijing this week, is prepared to address any Chinese concerns about the rising deficit and jittery bond market with an encouraging picture of a healing, more stable U.S. economy.

While he's far from declaring victory over the unprecedented financial crisis, Geithner says there are solid signs of repair.

"We are seeing more durable stability in the economy and the financial system is substantially in better shape," Geithner told reporters Saturday en route to Beijing, his first trip here since taking office in January. "But we have a ways to go, and we need to keep working in the U.S. and with other major economies to restore conditions for a sustainable recovery."

Geithner's upbeat take on the economy comes despite growing outside concerns about a recent surge in long-term interest rates. The rise in yields on U.S. Treasury bonds seem to reinforce Geithner's view that the recession is easing and investors no longer feel the need to rush to safety in the form of U.S. bonds. But it also means higher borrowing costs, even as federal officials launch creative programs primarily aimed at keeping rates low enough to boost the economy and thaw credit markets.

Geithner, who arrived in Beijing late Sunday afternoon and will here through Tuesday, is expected to reassure China - the largest holder of U.S. Treasurys - about its substantial investments in U.S. debt as well as the strength of the U.S. dollar. The concern for China is that soaring deficits will hurt the value of the dollar and diminish the value of their U.S. debt holdings.

"No one is going to be more concerned about future deficits than we are," Geithner told reporters traveling with him.

U.S. officials say that while the deficit is likely to rise as they take measures to stem the crisis, they are committed to taking new steps to control the deficit once the recovery is firmly established. That's a message Geithner is prepared to carry into his meetings this week.

"I will of course make it clear that we are committed to a strong dollar, that we are committed to bringing our fiscal deficits down over the medium-term to a sustainable place," the Treasury chief told the Chinese press, according to a transcript Treasury first provided U.S.-based reporters on Saturday. "We believe in a strong dollar. A strong dollar is in the U.S. interest."

Geithner added in that briefing that the Federal Reserve is "completely committed to keep inflation low and stable over time." The U.S. "will do anything we need to do to make sure that we bring down our fiscal deficits and improve the strength of the US economic fundamentals," he said.

Geithner will still be in China on Monday when battered domestic auto firm General Motors Corp. (GM) is expected to file for bankruptcy. But Treasury spokesman Andrew Williams on Saturday said "Geithner has been and will continue to be in contact with" Larry Summers and Steve Rattner, two key members of U.S. President Barack Obama's auto task force.

Geithner, meanwhile, has a full schedule in Beijing. He'll meet with President Hu Jintao, Chinese Premier Wen Jiabao, and Vice Premier Wang Qishan, who invited Geithner to China after the two officials met in London in April. Chinese officials have recently expressed fears about their U.S. debt holdings and questioned the use of the dollar as the world's reserve currency. But Geithner, in comments to the Chinese press ahead of his trip, said he expects the dollar's role in the financial system to remain substantial "for a very long time."

Meanwhile, on the trip to Beijing, Geithner said he wants to work with China as well as other key nations to strengthen the global financial system.

It's important for China to be a key participant in discussions on global financial reforms, he said, noting that the U.S. and China are among the two most important economies in the world.

"We are committed to reforming the international system and our interests are best served by giving China a stake in that process," he said. "We would like to build with China the kind of relationship we built with the G7 (Group of Seven leading nations) over the last several decades."

In addition to meeting with Chinese leaders, Geithner on Monday will speak at Peking University, where he studied Mandarin. He'll also visit the Ford Foundation, a place he has a personal interest in given that his father helped establish the Beijing office of the organization.

Experts say the crisis and rising deficits have left Geithner with less maneuverability to push China for immediate, significant economic policy changes. Instead, they see the secretary doing a lot of reassuring on the U.S. fiscal outlook while in meetings with his Chinese counterparts. It's also expected that the secretary will avoid making controversial currency issues the centerpeice of his talks.

Overall, Geithner said he wants to discuss a range of issues where the U.S. and China can deepen cooperation.

"Complaint diplomacy - that will not be my strategy," Geithner said during his press briefing at the Washington Foreign Press Center.

-By Maya Jackson Randall, Dow Jones Newswires; 202-862-9255; maya.jackson-randall@dowjones.com