BLBG:‘Enough’s Enough’ on China Currency: Obama
President Barack Obama said “enough’s enough†on the lack of movement by China on currency valuation, even if there has been “slight improvement†in recent months.
“Changes are difficult for them politically, I get it,†Obama said at a news conference today that concluded a summit with Asia-Pacific leaders in Hawaii. Still, he said, “enough’s enough.â€
Obama, who met yesterday with China’s President Hu Jintao in Honolulu, said that as China’s influence rises leaders of the world’s second largest economy must take more responsibility for making sure trade is fair and that intellectual property rights are respected.
As Obama seeks to reassert U.S. interests in Asia, he is using increasingly strong language to press China on trade, currency and intellectual property. The U.S. contends China’s currency is kept artificially low, putting American businesses at a disadvantage and driving up its trade surpluses.
China has pushed back against the pressure. After Obama told Hu yesterday that the U.S. public and businesses were losing patience with China’s policies, the Chinese Foreign Ministry released a statement saying the U.S. trade deficit and unemployment are not caused by the yuan exchange rate and a large appreciation in the currency won’t solve U.S. problems.
Continuing Reform
“China’s foreign exchange policy is a responsible one,†Hu told Obama, according to the statement. The country will “continue reforming its exchange rate mechanism.â€
The yuan has gained about 8 percent against the dollar in nominal terms since the country ended a two-year peg to the U.S. currency in June, 2010. In real terms the gain has been more than 10 percent, because inflation is higher in China than in the U.S.
The yuan rose 0.04 percent to 6.3400 per dollar as of 10:30 a.m. in Shanghai, according to the China Foreign Exchange Trade System.
During the news conference, Obama said the U.S. is examining stronger sanctions on Iran over its nuclear program. He said the U.S., Russia and China “agree on the objective†that Iran must not be allowed to develop a nuclear weapon. He declined to say whether Hu and Russian President Dmitry Medvedev gave any indication they would support a new round of penalties.
Sanctions Push
Russia and China have resisted efforts to impose tighter sanctions on Iran at the United Nations. The International Atomic Energy Agency has concluded that Iran, the second-largest oil producer in the Organization of Petroleum Exporting Countries after Saudi Arabia, has continued working on nuclear weapons capability until at least last year.
Obama said the sanctions that have already been imposed have “enormous bite.â€
He refused to directly comment on criticism of his approach to Iran leveled by the Republican candidates running for their party’s nomination to oppose him in next year’s election.
On domestic issues, Obama said the bipartisan congressional supercommittee working to narrow the U.S. budget deficit must “bite the bullet†and come up with a plan that includes both cutting spending and increasing revenue.
To contact the reporters on this story: Julianna Goldman in Honolulu at jgoldman6@bloomberg.net; Margaret Talev in Honolulu at mtalev@bloomberg.net;
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net
