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September 22, 2010

Obama Urges China to Act on Currency

by Kent Klein

An aide to U.S. President Barack Obama says the president has warned Chinese Premier Wen Jiabao that his government must do more to ease tensions over the value of China's currency.  

President Obama's top East Asia adviser, Jeff Bader, says economic issues occupied most of the leaders' meeting on the sidelines of the UN General Assembly in New York.

Bader described the tone of Thursday's meeting as candid, and said Mr. Obama talked about the importance of trade issues, and especially the currency issue.

In a meeting with reporters afterward, Bader said the president stressed that the U.S. is expecting more significant movement from China on the value of its currency.

"In the last few weeks, you have seen the president, the administration bring a couple of WTO cases against Chinese practices," said Jeff Bader. "So the president made clear, through that and in his meeting that he will protect US economic interests, and that we look for the Chinese to take actions.  If the Chinese do not take actions, we have other means to protect U.S. interests."

The U.S. says an increase in the value of China's currency would help reduce America's trade deficit with China, which was $145 billion in the first seven months of the year.

The day before meeting with Mr. Obama, Wen said allowing the Chinese currency to increase substantially would cause major turbulence in China.

According to Bader, the Chinese premier stated again Thursday his country's intention to continue reforming its exchange rate mechanism.

Bader said the U.S. had welcomed Chinese announcement last June that they would pursue a more flexible exchange rate policy, but that little action has followed.

"We were disappointed that there had not been much movement since, that this had consequences for the global economy and for the U.S. economy, and we look to see more rapid and significant re-evaluation in the months to come," he said.

On Capitol Hill, a House of Representatives committee is to vote Friday on legislation to allow U.S. officials to impose tariffs on Chinese products entering the United States.

President Obama and Premier Wen left the meeting promising further cooperation on economic and security issues.  They also said they were preparing for Chinese President Hu Jintao to make a state visit to the U.S. in the near future.