President Obama on Sunday displayed increasing frustration over China's currency, saying Beijing has not done enough to allow the yuan to reach a fair-market level.
"The United States and other countries, I think understandably, feel that enough is enough," said Obama, after an Asia-Pacific Economic Cooperation summit that witnessed a toughening of the U.S. line toward Beijing.
"I want certainly to continue cultivating a constructive relationship with the Chinese government," he said, after complaining that the level of the yuan gave an unfair advantage to Chinese exporters.
"We're going to continue to be firm in insisting that they operate by the same rules that everybody else operates under. We don't want them taking advantage of the United States or U.S. businesses," Obama said.
"When it comes to their economic practices, there are a range of things that they have done that disadvantage not just the United States but a whole host of their trading partners and countries in the region."
Senior U.S. officials told reporters that Obama spoke of the frustration and impatience of the American people with China's economic policy when he met President Hu Jintao in Hawaii on Saturday.
But China fired back, giving its own version of what transpired in the meeting with Obama.
"Even if the yuan rises substantially, it will not solve problems faced by the United States," Hu told Obama, according to an account posted on the foreign ministry website.
Hu said problems such as the U.S. trade deficit and unemployment are not caused by China's exchange rate, which he qualified as "responsible," and added Beijing will continue to steadily push forward currency reforms.
The United States and the European Union have long accused China of keeping its yuan artificially low, fueling a flow of cheap exports that have turned the rising Asian power into the world's manufacturing capital.
"Most economists estimate that the RMB (renmimbi, also known as the yuan) is devalued by 20% to 25%," Obama said. "That means our exports to China are that much more expensive and their imports into the United States are that much cheaper.
"Now there has been slight improvement over the last year, partly because of U.S. pressure, but it hasn't been enough," he said.
But China defends its exchange-rate system, saying it is moving gradually to make the yuan more flexible, but this has failed to silence critics in the United States who argue the Chinese currency is undervalued by about 30%.
The U.S. Senate last month approved a bill to impose punitive taxes on Chinese imports if the yuan is not revalued.
While resisting U.S. pressure, China has gradually allowed a rise in the strength of yuan in part in hopes of keeping in check inflation -- a major concern for a government that fears social instability.
Copyright Agence France-Presse, 2011
