US-China trade and currency row rumbles on at APEC summit
US President Barack Obama on Saturday used a Pacific Rim summit to press China over its flood of exports aided by a cheap yuan, but President Hu Jintao said it would make reforms at its own pace.business Updated: Nov 14, 2010 07:26 IST
US President Barack Obama on Saturday used a Pacific Rim summit to press China over its flood of exports aided by a cheap yuan, but President Hu Jintao said it would make reforms at its own pace.
The competing visions of the two economic giants were laid out a day after the Group of 20 knocked back US proposals for binding targets to address global trade imbalances and curbs on currency manipulation aimed at China.
Obama also made an appeal to tear down trade barriers, speaking as the 21 members of the Asia Pacific Economic Cooperation (APEC) forum kicked off a summit in Japan, which was clouded by tensions between its biggest economies.
Pitching an emerging treaty that would group countries on both sides of the Pacific, Obama said that "the security and prosperity of the American people is inextricably linked to the security and prosperity of Asia".
But in comments directed at the world's top exporter China, he also said that "countries with large surpluses must shift away from an unhealthy dependence on exports and take steps to boost domestic demand". "No nation should assume that their path to prosperity is simply paved with exports to America," said Obama, who just took heavy losses in mid-term elections dominated by claims that Chinese imports destroy American jobs.
Washington has urged Beijing to allow its yuan to rise, claiming it is undervalued to create an unfair trade advantage, although the US has been accused of doing the same with a USD 600 billion cash injection announced this month.
China's Hu, speaking at the same APEC business forum as Obama, insisted he would pursue gradual currency reform and efforts to promote free and balanced trade, and that other countries should not ask for too much too fast.
"We will continue to steadily move forward the reform of the renminbi exchange rate regime in a self-initiated, controllable and gradual manner," Hu said.
"To ask (emerging markets) to take on responsibilities and obligations beyond their capabilities and development stage will do no good to international cooperation and world economic development," he said.
On the tit-for-tat currency allegations between the US and China, IMF chief Dominique Strauss-Kahn noted that "everyone thinks that others should make more effort than oneself".
China's efforts to switch its economy towards domestic demand "will not happen in five minutes but it must be done as soon as possible," he told AFP.
"On the other hand, it is also necessary for the developed countries to make efforts to modify their own deficits. Everyone has their job to do at home."