U.S. and China Outline Competing Trade Agendas at APEC Summit
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In a clash of words, US president Barack Obama and Chinese premier Hu Jintao outlined duelling visions for world trade in back-to-back speeches at the APEC Summit, with Obama warning that Americans were growing increasingly frustrated and impatient over what they see as unfair Chinese trade and currency manipulation.
Taking China to task with some of his sharpest words yet, Obama used a CEO-address at the Asia-Pacific Economic Cooperation (APEC) summit to threaten punitive economic steps unless China started “playing by the rules.”
In a clash of words, US president Barack Obama and Chinese premier Hu Jintao outlined duelling visions for world trade in back-to-back speeches at the APEC Summit, with Obama warning that Americans were growing increasingly frustrated and impatient over what they see as unfair Chinese trade and currency manipulation.
Taking China to task with some of his sharpest words yet, Obama used a CEO-address at the Asia-Pacific Economic Cooperation (APEC) summit to threaten punitive economic steps unless China started “playing by the rules.”
“What I have said since I first came into office and what we’ve exhibited in terms of our interactions with the Chinese is we want you to play by the rules. And currency is probably a good example,” Obama said, referring to China’s fixed exchange rate policy.
“For an economy like the United States — where our biggest competitive advantage is our knowledge, our innovation, our patents, our copyrights — for us not to get the kind of protection we need in a large marketplace like China is not acceptable,” Obama said.
Even as Obama used his meeting with business leaders to highlight the outstanding issues in Sino-American relations, he also conceded the United States was partly to blame for losing economic ground.
“We’ve been a little bit lazy, I think, over the last couple of decades,” he said. “We’ve kind of taken for granted – well, people will want to come here – and we aren’t out there hungry, selling America and trying to attract new business into America,” he added.
In defence, China argued that it has already allowed the yuan to appreciate significantly. The yuan has realised gains of about 40 percent in real effective terms since China unpegged its currency to the dollar in 2005.
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At the same time, the Chinese president was quoted as saying US trade and employment woes were structural problems that could not be solved by even a major appreciation of the yuan, stressing instead the need for cooperation rather than confrontation between the two biggest economies.
Hu also called on Washington to relax restrictions on high-tech exports to China and make it easier for Chinese firms to invest in the United States.
Officials in Beijing say that a quick way for the U.S. to cut its trade deficit with the world’s second largest economy would be through lifting curbs on high-tech exports Washington considers sensitive.
While the International Monetary Fund maintains that China’s currency remains substantially undervalued, recent economic data from China have seen exports and inflation cooling down for a second consecutive month in October.
Related: China sees rapid growth in imports as export growth slows
But despite the calls for “trade reciprocity,” Beijing remains wary of the evolving trade pact that Washington is seeking around the Asia-Pacific region, a move that is widely seen as part of a US drive to provide a counterweight to China’s influence in the region.
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