* New world model for growth needed - US official
* Exchange rates to stay at heart of G20 talks-Brainard
* Brainard: China's Hu affirms resolve for flexible yuan
* U.S. needs "good deal" on Korea free trade pact (Recasts, adds comments on China, Korea free trade talks)
By David Lawder
WASHINGTON, Nov 16 (Reuters) - The world-wide financial crisis has made clear to reformers and policymakers in China that depending on overextended American consumers was not a good growth model for it, nor for the world, U.S. Treasury Under Secretary Lael Brainard said on Tuesday.
Brainard, who sat in on bilateral talks between Chinese President Hu Jintao and President Barack Obama at last week's G20 meetings in Seoul, said Hu "affirmed strong resolve" to move forward with a more flexible exchange rate regime and reported on progress in lifting the yuan's value.
"There is a recognition coming out of the crisis that this growth model needs to change and more broadly there needs to be a shift in global demand," Brainard said.
Hu is due to visit Washington early in 2011.
G20 leaders also pledged to enhance exchange rate flexibility to reflect underlying economic fundamentals, and Brainard said exchange rates will be at the heart of Group of 20 talks in coming months aimed at setting a framework for correcting global economic imbalances.
"Exchange rates will be a central focus of those discussions," she told a conference sponsored by the Center for Strategic and International Studies.
"We are working hard to ensure that China makes progress in allowing its exchange rate to appreciate in response to market forces," Brainard said.
She said Beijing has allowed an "accelerated pace of appreciation" in recent months. "If sustained, the pace of China's appreciation would make a material contribution to addressing the undervaluation of its currency," she added.
Brainard handled last week's negotiations for the United States over language in a statement by Group of 20 leaders in Seoul, South Korea.
The G20 summit of rich and emerging-market countries agreed to set "indicative guidelines" for measuring imbalances between their multispeed economies. But they called a timeout to let tempers cool and charged finance ministers with working out details in coming months.
Regarding the failure of the United States and South Korea to sign revisions to a stalled free trade agreement in Seoul, Brainard said that while both countries were committed to a deal, "we weren't there yet in Seoul."
Negotiators in Seoul failed to resolve U.S. concerns that the pact signed three years ago does not go far enough to open South Korean markets to U.S. beef and autos.
"What's more important is that we get a good deal" on a U.S.-Korea trade deal, Brainard said. (Additional reporting by Glenn Somerville; Editing by Dan Grebler)