US-CHINA

OBAMA SIGNALS CLOSER TIES WITH CHINA'S HU EVEN AMID FRICTIONS OVER RIGHTS

Nicholas Johnston and Michael Forsythe

Bloomberg, January 20, 2011

U.S. President Barack Obama and President Hu Jintao of China said their countries can keep fostering commercial ties while working through differences on currency policy and human rights.

Meeting yesterday for the eighth time, both leaders stressed the benefits of increased trade. Obama told U.S. and Chinese chief executives at the White House that the relationship goes beyond “old stereotypes” of cheap Chinese labor taking away American jobs. Hu, the head of China’s ruling Communist Party, said he would encourage investment in the U.S.

That didn’t stop Obama from criticizing China’s policy on the yuan, blamed by his administration and lawmakers for making American exports too expensive, curbing job growth and contributing to a U.S. trade deficit with China that reached a monthly record of $28 billion in August.

“The RMB is undervalued,” Obama said during a joint news conference with Hu, using an acronym for the currency also known as the renminbi. “The Chinese government has intervened very forcefully in the currency markets -- they’ve spent $200 billion just recently, and that’s an indication of the degree to which it is undervalued.”

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