President Obama vows tougher trade stance toward China

(TibetanReview.net, Feb05, 2010)  Far from going on the defensive over China’s virulent criticisms of him over the decision to sell arms to Taiwan and meet with the Dalai Lama, US President Barack Obama has said he will be much tougher with China to make sure it opens its markets to trade with the US, according to BBC News online Feb 4.

While refusing to take a protectionist stance, President Obama has told Democratic Party senators that he would put "constant pressure" on China and other countries to stick to their side of trade agreements.

"Our future is going to be tied up with our ability to sell products all around the world, and China is going to be one of our biggest markets," he was quoted as saying.

One of the biggest US concerns has for long been China’s deliberate undervaluing of its currency vis-a-vis the US dollar in order to boost its exports and undercut imports from the US, resulting in a massive trade imbalance in its favour. Obama has agreed to act on that too, although not spelling out any specific measures.

The Peterson Institute for International Economics in Washington has estimated that the yuan is undervalued by about 30 percent against all world currencies and about 40 percent against the dollar, noted Reuters Feb 4.

China’s has, however, reacted sharply to Obama’s comment, saying the yuan was already at a reasonable level. "Accusations and pressure do not help to solve the problem," the reported quoted Chinese Foreign Ministry spokesman Ma Zhaoxu as saying at a regular news briefing.

Luke Obama, China, on the defensive, obviously does not want to see this escalate into a trade war. "It's very normal to see some disputes between China and the United States, but this doesn't mean there will be a bust-up." The report quoted Zuo Chuanchang, a researcher with the Academy of Macroeconomic Research, a think-tank under the National Development and Reform Commission, as saying. "It's a political show, and it does really mean too much."