US and China hit wall over yuan debate
US PRESIDENT Barack Obama is due to visit The Great Wall of China today – but at the end of his tour of the region it seems the stumbling block of China’s currency is just as tough to surmount.
Obama yesterday urged China to let its yuan currency rise in value at a summit where strains between the two giants were barely masked by proclamations of goodwill.
He said allowing the yuan to appreciate against the dollar “would make an essential contribution to the global rebalancing effort”. Washington says an undervalued yuan is contributing to imbalances between the two big economies.
But standing beside Obama after their summit, Chinese President Hu Jintao avoided mentioning the yuan or the dollar and Obama was forced to hark back to a previous statements where China said it would work towards a more market-oriented exchange rate.
For his part, Hu emphasised the need to avoid trade protectionism in a thinly veiled reference to China’s irritation over new US tariffs on Chinese-made tyres, steel pipes and other products.
Hu said the two leaders talked of the need to keep in close contact on “macroeconomic and financial policies”.
“I stressed that under the current circumstances, we need to oppose all kinds of trade protectionism even more strongly,” Hu said.
Asked about the lack of resolutions, White House press secretary Robert Gibbs said: “We didn’t think the waters would part and everything would change with just one visit.”