By Jim Christie

SAN FRANCISCO (Reuters) - The United States is willing to open up its markets to China and give it more access to U.S. technologies if Beijing makes progress on key issues, U.S. Treasury Secretary Timothy Geithner said on Thursday.

"We are willing to continue to make progress on these issues, but our ability to do so will depend in part on how much progress we see from China on issues that are important to us," Geithner said ahead of government meetings in Beijing next week.

Geithner said China's financial system is still dominated by large state-owned banks that favor lending to large state-owned companies, and he urged the country to raise the ceiling on deposit rates so that Chinese households could earn a higher return on their savings.

Higher deposit rates would help reduce the need of Chinese households to save, increase their income and their ability to consume goods and services, including those from the United States, he told the Commonwealth Club of California.

Geithner pledged that the United States would continue to push aggressively for fair treatment of U.S. companies doing business with China, and he repeated that China's currency, the renminbi, needed to appreciate more rapidly.

A stronger, more market-determined renminbi will provide China the "independence and flexibility to respond to future changes in growth and inflation," he said.

Geithner said China had made significant progress on a number of U.S. objectives, including opening up new sectors of its economy to foreign firms and committing to improve the protection of U.S. intellectual property rights.

China also eased some restrictions on its currency by doubling the size of the yuan's trading band against the dollar.

"The economic relationship between the United States and China provides significant benefits to both our nations. Even though we compete in many areas, our economic strengths are largely complementary," he said.

Geithner and Secretary of State Hillary Clinton will meet with their Chinese counterparts next week as part of a series of ongoing talks designed to strengthen ties between the world's two largest economies.

U.S. lawmakers acknowledged that the majority of states and congressional districts were benefiting from a jump in U.S. exports to China, but said more had to be done to open Chinese markets to American goods and services.

Foreign banks and institutions "currently face a nearly impossible uphill struggle in the Chinese marketplace," Democratic Senator Mark Warner and Republican Senator Mike Johanns said in a letter to Geithner this week.

(Reporting by Jim Christie, Glenn Somerville, Rachelle Younglai; Editing by Ruth Pitchford and Lisa Shumaker)