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The dialogue mechanism was established on the basis of a consensus reached between the two presidents, Wu said.

"What the Chinese government is doing and the pace of change is remarkable," Paulson said. "This time I came here to encourage Chinese leaders to move forward the reform of the capital market."

Depicting the dialogue mechanism as a "unique opportunity and great initiative" that "reflects the 21st century global economy and redefines the US-China economic relationship", Paulson said he would work with the Chinese leadership to make this dialogue "practical", and strengthen the long-term economic relationship between the two countries.

The dialogue will convene twice a year in Beijing and Washington, with the first meeting to be held before the end of 2006.

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