From a Reuters interview with President Obama earlier in the week in anticipation of his trip to Asia, “Obama: strains unless US, China balance growth“:
[He] warned that the economic relationship between the two countries had become “deeply imbalanced” in recent decades, with a yawning trade gap and huge Chinese holdings of U.S. government debt.
Obama said he would be raising with Chinese leaders the sensitive issue of their yuan currency — which is seen by U.S. industry as significantly undervalued — as one factor contributing to the imbalances.
“As we emerge from an emergency situation, a crisis situation, I believe China will be increasingly interested in finding a model that is sustainable over the long term,” he said. “They have a huge amount of U.S. dollars that they are holding, so our success is important to them.”
“The flipside of that is that if we don’t solve some of these problems, then I think both economically and politically it will put enormous strains on the relationship.”
The Hill had a follow-up story, “Obama to China: Currency and trade imbalances a focal point,” with the NAM’s positive reaction.
I think it is significant he brought this up in an interview and it’s more than a passing comment,” said Pat Mears, who works on China issues for the National Association of Manufacturers. She said U.S. manufacturers don’t expect things to change overnight, but offered hope that China will again allow its currency to appreciate against the dollar, as it did for more than a year before the financial crisis hit in 2008.
And new stories on the cusp of his departure today.
- BBC News,”Obama leaves for Asia trade drive”
- The Associated Press, “Obama faces daunting challenges in Far East tour”
- Wall Street Journal, “An Agenda for Obama in China
- Asia Times Online, “China trade surplus shadows Obama visit“
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