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Obama asks China to act like 'grown up' economy

business Updated: Nov 15, 2011 00:43 IST

US President Barack Obama has pressed China to recognise it is now a "grown up" economy and start behaving more responsibly on currency and trade issues hurting American companies.

China needs "to understand that their role is different now than it might have been 20 years ago or 30 years ago when if they were breaking some rules it didn't really matter, it didn't have a significant impact," Obama said at the end of an Asia-Pacific leaders' meeting.

"Now they have grown up. They are going to have to help manage this process in a responsible way."

However, a Chinese official said: "China will play by the rules of international agreements that it has been party to negotiating.

The Chinese official's remarks were a clear rebuttal to US President Barack Obama.

"First we have to know whose rules we are talking about," said Pang Sen, a deputy director-general at China's Foreign Ministry.

"If the rules are made collectively through agreement and China is a part of it, then China will abide by them. If rules are decided by one or even several countries, China does not have the obligation to abide by that," Pang said at a news conference after the APEC summit in Honolulu.

The United States frequently criticises China for blocking fair access to its markets, for keeping its currency artificially undervalued and stealing intellectual property.

Pang also said that China would "earnestly study" the Trans Pacific Partnership trade negotiations, which Canada, Japan and Mexico have asked to join giving a major boost to the U.S.-led initiative.

Earlier, Obama said: "The United States welcomes the "peaceful rise" of China but too often Beijing is guilty of "gaming the system" to its own advantage".

"We're going to continue to be firm that China operate by the same rules as everyone else," Obama said.

Obama and Chinese President Hu Jintao had face-to-face talks during this weekend's summit of the Asia-Pacific Economic Cooperation forum, a group of 21 countries that accounts for more than half of world economic output.

As the world's two largest economies, the United States and China spar often on trade issues, with the U.S. Senate recently passing legislation to prod Beijing to let its currency, known as the yuan and the renminbi, rise more rapidly in value.

"Most economists estimate that the renminbi is devalued by 20 to 25 percent. That means our exports to China are that much more expensive and their imports into the United States are that much cheaper," Obama said.

"There has been slight improvement over the last year partly because of U.S. pressure but it hasn't been enough. It is time for them to go ahead and move towards a market based system for their currency."

Obama said he has consistently told Hu and other Chinese leaders that American companies are not afraid of competition, as long as there is a level playing field.