Obama presses Chinese prime minister to let currency rise
UNITED NATIONS — President Barack Obama increased pressure on China on Thursday to immediately revalue its currency, devoting most of a two-hour meeting with China’s prime minister to the issue and sending the message, according to one of his top aides, that if “the Chinese don’t take actions, we have other means of protecting U.S. interests.”
But Prime Minister Wen Jiabao barely budged beyond his familiar talking points about gradual “reform” of China’s currency policy, leaving it unclear whether Obama’s message would change Beijing’s economic or political calculus.
The unusual focus on this single issue at such a high level was clearly an effort by the White House to make the case that Obama was putting U.S. jobs and competitiveness at the top of the agenda in a relationship that has endured strains in recent weeks on everything from territorial disputes to sanctions against Iran and North Korea.
Democrats in Congress are threatening to pass legislation before the midterm elections that would slap huge tariffs on Chinese goods to undermine the advantages Beijing has enjoyed from a currency, the renminbi, that experts say is artificially weakened by 20 percent to 25 percent.
Obama’s aides said he was embracing the threat of tariffs and new trade actions against China at the World Trade Organization to gain some leverage over the Chinese but was also trying to head off any action that would lead to a destructive trade war.
Jeffrey Bader, the senior director for Asia at the National Security Council, told reporters that the two men engaged in “a lengthy discussion about the impact and the politics of the issue.”
While the United States has been pressing China for years to lift the strict controls on its currency, which keep Chinese exports competitive and more factory workers employed, U.S. voters and lawmakers have only recently seized on exchange rates as a potent political issue. Obama pressed much harder Thursday than during a visit to Beijing last year, perhaps because a Chinese commitment several months ago to allow the value of the currency to rise has resulted in a change of less than 2 percent.
The meeting with Wen came as the United States appeared to lean toward its longtime ally, Japan, in an increasingly heated standoff between China and Japan over who has claim on territory near the South China sea.