Barack Obama About China Undervaluing Yuan: ‘Enough’s Enough’

Speaking at the Asia Pacific Economic Cooperation (Apec) summit in Hawaii, President Obama said China needed to follow the same rules as other nations.

President Barack Obama and other leaders wait to move to the site of the official Family Photo at the APEC summit in Honolulu, Hawaii, Sunday, Nov. 13, 2011. From left: His Royal Highness Sultan of Brunei Hassanal Bolkiah; Prime Minister Yoshihiko Noda of Japan; President Obama; President Dmitry Medvedev of Russia; Prime Minister Julia Gillard of Australia, and Prime Minister Stephen Harper of Canada. Photo: Pete Souza/The White House

“Enough’s enough,” Obama said bluntly at a closing news conference of the Asia-Pacific Economic Cooperation summit where he scored a significant breakthrough in his push to create a pan-Pacific free trade zone and promote green technologies.

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.

“We’re going to continue to be firm that China operate by the same rules as everyone else,” Obama told reporters after hosting the 21-nation APEC summit in his native Honolulu. “We don’t want them taking advantage of the United States.”

“First we have to know whose rules we are talking about,” Pang Sen, a deputy director-general at China’s Foreign Ministry said.

“If the rules are made collectively through agreement and China is a part of it, then China will abide by them. If rules are decided by one or even several countries, China does not have the obligation to abide by that.”

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 United States has long complained that China keeps its currency artificially weak to give its exporters an advantage. China counters that the yuan should rise only gradually to avoid harming the economy and driving up unemployment, which would hurt global growth.

The sharp words between the U.S. and China contrasted with the unified front that Asia-Pacific leaders sought to present with a pledge to bolster their economies and lower trade barriers in an effort to shield against the fallout from Europe’s debt crisis.

The leaders said in a statement earlier on Sunday that Europe’s fiscal crisis and natural disasters such as Japan’s earthquake had strengthened the resolve to work more closely together.

“We recognise that further trade liberalisation is essential to achieving a sustainable global recovery in the aftermath of the global recession of 2008-2009.”

However analysts said whether those promises were turned into action when the leaders returned home remained to be seen.

Increasing trade also means opening up markets to foreign competition, something some Asia Pacific countries have been reluctant to do in the past.

Yesterday Barack Obama met with Trans-Pacific Partnership (TPP) leaders, Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam.

The President noted after the meeting: ‘We just had an excellent meeting, and I’m very pleased to announce that our nine nations have reached the broad outlines of an agreement.  There are still plenty of details to work out, but we are confident that we can do so.  So we’ve directed our teams to finalize this agreement in the coming year.  It is an ambitious goal, but we are optimistic that we can get it done.’

In the afternoon, President Obama hosted bilateral meetings with Prime Minister Noda of Japan, President Medvedev of Russia and President Hu of China.

During the meeting with President Hu of China Mr Obama noted that cooperation between the world’s two of the largest countries and largest economies was vital not only to the security and prosperity of our own people, but also vital to the world.

He said: ‘Such cooperation is particularly important to the Asia Pacific region, where both China and the United States are extraordinarily active.  We are both Pacific powers.  And I think many countries in the region look to a constructive relationship between the United States and China as a basis for continued growth and prosperity.’ [via The White House, Reuters, Bloomberg and BBC]


Share this article

We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language, all capital letters or appear to be spam, and we review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Coinspeaker Ltd.