BEIJING (Reuters) – The U.S. Federal Reserve should communicate better with China and financial markets on its interest rate decisions, China’s vice finance minister said on Thursday, noting U.S. monetary policy has a major impact on the global economy.

Chinese and U.S. officials will discuss how to promote economic growth in both countries and the world economy during the annual U.S.-China Strategic and Economic Dialogue to be held June 6-7 in Beijing, Vice Finance Minister Zhu Guangyao said.

“It’s up to the Federal Reserve to make ultimate monetary policy decisions, but we welcome the Fed to strengthen policy communication with China and strengthen communication with the international financial market,” Zhu said in a forum ahead of the annual dialogue.

Global market attention is currently focused on whether the Fed will raise interest rates at either its June or July policy meetings, he said.

In turn, China, as the world’s second-largest economy, should also improve its communication with the outside world given the increased “spillover” effect of its policies, Zhu said.

Chinese market regulators came under criticism last year after a rout in stocks and an unexpected currency devaluation raised concerns about Beijing’s ability to effectively communicate economic and market policy intentions.

Zhu also said the global economy faces significant downward pressure.

Last week, Fed Chair Janet Yellen said the Fed should raise interest rates “in the coming months” if the economy picks up as expected and jobs continue to be generated, bolstering the case for a rate increase in June or July.

China and the United States should open their markets to each other and increase policy coordination and cooperation, Zhu said.

A senior U.S. Treasury official said last month they would press their Chinese counterparts to take steps to improve China’s business and investment climate during the dialogue attended by U.S. Treasury Secretary Jack Lew.

A focus on the inability of U.S. firms to invest in certain services sectors, including tourism, healthcare and logistics, comes as the Obama administration seeks to negotiate a bilateral investment treaty with China.

U.S. negotiators have said they are still awaiting a new “negative list” of sectors that Beijing wants to keep off limits to foreign investors.

Zhu said China was committed to pushing forward talks on the investment treaty.

The U.S. Treasury will also press China to continue moving towards a market-determined exchange rate, reduce excess industrial capacity, and make reforms that boost domestic consumption, a senior Treasury official said on Wednesday.

(Reporting by Kevin Yao and Beijing monitoring desk; Additional reporting by Ben Blanchard; Editing by Sam Holmes)

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