At White House, Chinese Leader Pledges Currency Effort ….

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Author: Koffler, Keith

Foreign Affairs

Visiting today with President Bush at the White House, Chinese President Hu Jintao promised to continue increasing the value of China's currency and to take other steps to moderate the U.S. trade deficit with China and improve trade ties between the two countries. "We understand the American concerns over the trade imbalances, the protection of the intellectual property rights and market access," Hu said. "We have taken measures, and we'll continue to take steps to properly resolve the issues." Hu denied that China is trying to ramp up its trade surplus with the United States, saying China is attempting to boost its domestic demand, which would increase purchases of U.S. products. "China pursues a policy of boosting domestic demand, which means that we'll mainly rely on domestic demand expansion to further promote the economic growth of the country," Hu said. "We do not pursue an excessively high trade surplus."

Hu's comments come as some lawmakers are pushing for steps to reduce exports from China, focusing their ire on the unwillingness of China so far to fully allow its currency to float freely. "We have already launched the reform on the RMB â€" Chinese currency â€" exchange rate regime, which has paid off initially," Hu said. "And in the future, we will continue to make efforts to improve the RMB exchange rate regime." Hu also pledged to "take positive steps in such areas as expanding market access, increasing imports, and strengthening the protection of intellectual property rights, and [to] further expand China-U.S. economic cooperation and trade." Bush welcomed Hu's remarks. "Obviously, the Chinese government takes the currency issue seriously, and so do I," Bush said. Hu also called on the United States to relax restrictions on high-tech exports to China.

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By Keith Koffler