By DPA,
Washington : US President Barack Obama has said he considered China’s currency to be undervalued and that it was in the Asian power’s own interest to allow the renminbi (yuan) to appreciate.
While Obama did not directly say that the renminbi was being kept artificially low, he Tuesday encouraged the Chinese government to allow its currency to be more closely aligned with market demands.
“It is my estimation that the renminbi is undervalued and that China’s own decision in previous years to begin to move towards a market-based approach is the right one,” Obama told reporters at the end of a summit on nuclear security in Washington.
The US has long prodded China to allow a stronger renminbi, ending the advantage it gives Chinese companies and allowing fairer competition for US firms. China has rejected allegations that it is artificially holding down its currency.
Obama argued that a stronger currency would be in China’s own interest by helping to reduce its over-reliance on exports. Since a deep US recession began in December 2007, the United States has argued that other countries will no longer be able to rely on US consumers to power their economies.
“China rightly sees this issue of currency as a sovereign issue,” Obama said. “But it is my belief that it is actually in China’s interest to achieve this rebalancing” of its economy.
Obama met for 90 minutes with Chinese President Hu Jintao on the sidelines of the two-day summit Monday to help smooth over relations, which hit a low point in recent weeks amid spats over internet restrictions, the economy and Iran’s nuclear programme.
Obama said the recent “turbulence” in ties “was actually relatively modest when you look at the overall trajectory of US-China relations.”