WASHINGTON, (Reuters) – President Barack Obama urged Chinese President Hu Jintao to let the value of China’s yuan currency rise and delivered a strong message on U.S. concerns over Beijing’s human rights record at a summit yesterday.
Both leaders spoke glowingly about cooperation but made no major breakthroughs on a range of disputes over trade and security that have strained relations between the two global powers over the past year.
Hu was greeted with a 21-gun salute and an honor guard, but frictions showed through beneath the pomp of the state visit.
At a sometimes awkward White House news conference marred by translation difficulties, Obama said he was “very candid” with Hu about respecting human rights, and reiterated that Beijing was not moving fast enough to strengthen the yuan.
Hu was quiet on the currency and initially did not respond to a reporter’s questions on human rights, but later said he had not heard properly because of a translation problem. He later conceded China had much to do on the rights question.
Economic issues took up about half of the bilateral talks between the two leaders, said a U.S. official who spoke on condition of anonymity.
Hu gave up little aside from $45 billion in export deals that seemed aimed at quelling anti-Chinese sentiment in the United States and allowing Obama to tout job creation as U.S. unemployment remains stubbornly above 9 percent.
Although that price tag looked impressive, the amount was spread out over several years and it was unclear how much of it included previously negotiated deals.
“We’ve shown that the United States and China, when we cooperate, can receive substantial benefits,” Obama said with Hu at his side at the White House news conference.
“We want to sell you all kinds of stuff,” the U.S, president said, drawing laughter from the packed room.
Obama zeroed in quickly on one of the most sensitive disputes between the world’s two biggest economic powers, telling Hu that China’s yuan remains undervalued. Beijing’s critics say its currency practices hurt the competitiveness of U.S. business by making its exports artificially cheap.
“There needs to be further adjustment in the exchange rate,” Obama said bluntly.
Hu listened to Obama’s complaints about the yuan but pointedly did not reply, giving no clues about China’s intentions on the hot-button issue.
The yuan has risen about 3.7 percent against the dollar since June, when China loosened its grip on the currency. Because of China’s high inflation, the effective exchange rate has appreciated by considerably more.
Doug Smith, an analyst with Standard Chartered Bank in New York, said China doesn’t respond well to outside pressure, so Obama’s tough talk may have been aimed at a domestic audience.
“I think for internal (U.S.) consumption you have to make some noise,” Smith said. “I don’t think it matters much in practical terms. Many other things matter more than the exchange rate.”
