Treasury Secretary Timothy Geithner said Wednesday he's encouraged by efforts in Japan and China to spur domestic demand instead of relying so heavily on American consumers _ a shift that will contribute to more stable global growth.

Geithner said he sees broad recognition among governments to create policies that will lead to more balanced, sustainable growth and avoid the kind of dangerous imbalances that contributed to the world recession.

"We're very, very encouraged to see what's happening here in terms of a broad reform agenda ... to try to produce an economy more dependent on domestic sources of growth," Geithner said in Tokyo on his way to joining Pacific Rim finance ministers meeting in Singapore for the annual APEC summit.

If the world economy is to grow in a stable way, he said, "it's going to be less driven by the American consumer. You need to see a change in the sources of growth."

Economic cooperation is expected to be a key agenda item during President Barack Obama's visit to Tokyo on Friday and Saturday that will also address security and climate change. Japan is Obama's first stop on an Asian tour that will take him to China and South Korea next week after attending the Asia-Pacific Economic Cooperation summit in Singapore this weekend.

Asian countries have been refocusing their efforts on boosting demand at home since their economies were battered by a collapse in exports amid the economic crisis.

In Japan, the world's No. 2 economy, the government has been offering consumers incentives to buy environmentally friendly products such as hybrid cars and energy-efficient appliances. The new government under Prime Minister Yukio Hatoyama also has pledged to center its policies on consumers, instead of large companies, and has pledged monthly cash handouts of $280 to families with young children.

In China, the third-largest economy, massive stimulus, tax cuts and expanded social welfare policies have spurred buying of cars and other consumer items, with the government reporting Wednesday a 16 percent surge in retail sales last month.

Such efforts are "an important complement to what we're doing in the United States, as Americans save more," Geithner told reporters after meeting with Hatoyama Wednesday and Finance Minister Hirohisa Fujii on Tuesday evening.

Geithner cautioned that it takes time for major economic reforms, but that he saw stronger domestic-demand led growth in both Asian economies.

The treasury secretary also said welcomed Beijing's commitment to shifting to a "more flexible market-oriented exchange rate" over time. Continued...