January 19, 2011President Obama told Chinese President Hu Jintao Wednesday that China's currency is still undervalued and should be increasingly driven by markets.
Obama also told a joint news conference that the United States and China have a responsibility to tackle climate change and build on international pledges made at summits in Copenhagen and Cancun.
Obama used his opening statement to address one of the major economic disputes between the United States and China—Washington's contention that China's currency is undervalued and is hurting the U.S. economy as a result.
"I told President Hu that we welcome China's increasing the flexibility of its currency. But I also had to say that the renminbi remains undervalued, that there needs to be further adjustment in the exchange rate," Obama said.
Obama said he told Hu that changing the yuan policy "can be a powerful tool for China boosting domestic demand and lessening the inflationary pressures in their economy."
"So we'll continue to look for the value of China's currency to be increasingly driven by the market, which will help ensure that no nation has an undue economic advantage," he said.
In response to a reporter's question about the effect of a weaker yuan on the United States economy, Obama said he believed "it's important to look at the entire economic relationship and the currency issue is one part of it."
Hu said the two leaders discussed disagreements on economic issues and trade, but said he and Obama had agreed to "share expanding common interests."
"We both agreed to further push forward the positive cooperative and comprehensive China-U.S. relationship and commit to work together to build a China-U.S. cooperative partnership based on mutual respect and mutual benefit, so as to better benefit people in our own countries and the world over," Hu said.
Hu, speaking through a translator, said both countries should "respect each other's sovereignty, territorial integrity and development interests."
Obama said, "I absolutely believe China's peaceful rise is good for the world, and it's good for America."
As both countries continue to recover from the global economic crisis—a recovery that began in China well before it did in the U.S. and other developed nations—the United States increasingly sees China as a market for its goods, Obama said.
"We want to sell you all kinds of stuff," Obama told Hu. "We want to sell you planes, we want to sell you cars, we want to sell you software...and as President Hu and his government refocuses the economy on expanding domestic demand, that offers opportunity for U.S. businesses that ultimately translates into jobs."
AP
