With the large amount of excess capacity built up during the past boom times yet to be digested, reduced consumer demand for products will make a dent in both economies, Straszheim said.

In response, China is widely expected to rebalance its economy away from its current dependence on exports and toward private consumption, while the United States must shore up its investments since it cannot afford another round of over-leveraged household spending.

Economists at the summit welcomed China's push into innovative and high-value industries, as well as the government's efforts to build a viable social safety net that could spark a surge in domestic consumption. A higher rate of precautionary savings in the United States also would help restore the household balance sheet and provide a floor under the buckling financial system, they said. The entrenched consumption-savings imbalances between the two economies must be gradually redressed, they added.

Yet, the road to economic revitalization will not be smooth sailing. China's economic growth, without a vibrant export engine, may no longer be able to operate in high gear, because the country's consumer market still needs time to grow, Straszheim said. The United States, in turn, will have to cope with a shortage of fiscal ammunition to jumpstart the economy, he said. It also faces questions about how to address the problems of monetary, credit and asset restructuring to repair its tattered financial system, he added.

"We should join hands to evolve with a new foundation for future growth," Straszheim said. "There is a real need for continuous cooperation between us to overcome those challenges together."

Zhu Min, Vice President of Bank of China Ltd. (BOC), echoed Straszheim's opinion, citing the Sino-U.S. Strategic Economic Dialogue as an important stage for coordination.

"Never before have we been so close to each other," he said. "The first step of cooperation should be to enhance our mutual understanding and policy transparency in a concerted effort to temper the growing slack."

Norman Yen, Board Advisor of SmithStreetSolutions Consulting Co. Ltd., a Shanghai-based knowledge process outsourcing firm, said coordination may be difficult for the two economies, which have their own preoccupations, but the dialogue serves as a good start.

Opportunities on the horizon

Although it came as a heavy blow to the Chinese economy, the global downturn has been more of a double-edged sword whose upside has started to shine through.

Now is a good time for the country to nurture a consumption-driven growth model that is more sustainable and efficient in both economic and environmental terms, said Yen. To achieve that, more meat must be added to the bones of industrial restructuring plans, and the government must ensure that quality plans are implemented, he said.

For China's ambitious enterprises, the downturn also provides them with a rare opportunity to become more globally competitive. Through outbound organic expansion or cross-border mergers and acquisitions, they can get access to advanced technologies, raw materials, marketing and distribution channels, global brands and global management teams.

Another bright spot for both domestic and foreign investors is China's rural market that is emerging as a potential driver for the flagging economy. Cao Yuanzheng, chief economist at BOC International Holdings Ltd., said China's numerous towns and villages would increasingly become important targets of investments. For example, the rural areas where financial services and capital are scarce may provide chances for foreign banks and private equity investors, he said.

Rural China is no longer simply a source of emigrants bound for the cities, but a hotbed of prosperity, said Peter Rupert Lighte, Chairman of JP Morgan Chase Bank (China) Co. Ltd. But that will eventually require a dynamic integration of cities and villages, he said. For instance, the government must draw rural migrants to smaller and newer cities closer to their original homes so that the geographic and financial urban-rural divides will be diminished, he said.

Green economy

In addressing their different economic woes, China and the Untied States took similar low-carbon paths to green growth. While China embarked on a spending spree on environment protection, the United States resorted to a tax cut for clean energy industries.

The "green" stimuli have the capacity to inject steam into both economies in a sustainable and efficient way, said William J. Friedman, Director of Food & Drug Asia at Covington & Burling LLP, a renowned law firm based in the United States. The countries' enormous economic and social benefits range from higher energy efficiency and healthier agricultural products to green job creation and conservation-based enterprises, he added.

Richard J. Schulberg, Executive Director of the International Sustainable Development Foundation, agreed with Friedman.

"We are still confronting a crisis of neglect in many places around the world about the ecological system and the climate change that might be even more crippling to the world's future than the current financial crisis," he said. "The financial crisis is also mounting pressure on us to be more productive and energy-efficient. As a result, the pursuit of the green economy is not an option, but a necessity for the promising future."

Gary William Dirks, Group Vice President of BP Plc, believes that China and the United States can play a positive role in fostering the green economy by strengthening their financial support for green policies and creating standards.

The two countries have a good opportunity to cooperate in a number of areas, such as protecting the ecosystem, promoting energy-efficient vehicles and developing a smart grid that is highly efficient in power transmission and distribution, he said.