NEW YORK (Reuters) – US President Barack Obama urged Chinese Premier Wen Jiabao to take rapid steps to address a dispute over the value of China’s currency and made clear the United States would protect its economic interests.
A two-hour meeting between Obama and Wen on the sidelines of the UN General Assembly yesterday was dominated by a lengthy, candid discussion about an issue that has been a persistent irritant in US-Chinese relations and now has the attention of US lawmakers.
The talks between Obama and Wen came as US lawmakers appeared to move closer than ever to acting on long-standing threats to pass legislation that would penalize China for keeping its currency artificially weak.
Critics inside and outside Congress say China deliberately undervalues its currency by as much as 25 per cent to 40 per cent to give Chinese companies an unfair trade advantage, hurting US exports and employment.
Both Obama and Wen spoke in diplomatic niceties in their public remarks at a picture-taking session as their talks began. Obama stressed that both countries must work to achieve balance and sustained economic growth and Wen said, “Our common interests far outweigh our differences.”
During their private talks, Obama said the currency issue was the “most important issue” of their meeting, said Jeffrey Bader, the senior National Security Council official for Asia. He said there was a far more intensive discussion of the topic than in their previous meetings.
Bader said Obama “made clear that we’re expecting to see more action, more significant movement” on China’s yuan in the months ahead and noted that the Obama administration had authorized a couple of complaints about Chinese trade practices through the World Trade Organization.
“So the president made clear that, through that and in his meeting, that he’s going to protect US economic interests and that we look for the Chinese to take actions. If the Chinese don’t take actions, we have other means of protecting US interests,” Bader said.
Wen told Obama that China would press ahead with reforming exchange rate rules for the yuan, Bader said.
“Premier Wen did reiterate the Chinese intention to … continue with reform of their exchange rate mechanism,” he said.
Wen’s delegation did not speak to reporters after the meeting, but during the picture-taking session Wen told Obama he believed all differences between the United States and China could be resolved through dialogue and that he had a constructive attitude.
Wen and Obama also discussed tensions between China and Japan in the East China Sea.
