Trained to Fail

Trained to Fail

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WASHINGTON — China and the United States should solve their economic and trade differences through consultations on an equal footing and jointly uphold the larger interests of China-US economic cooperation and trade, Chinese President Hu Jintao said here on Monday.

During a meeting with US President Barack Obama, Hu said the sound and stable development of China-US economic ties is good for China, for the United States, and for the world economic development.

China will push forward with revaluation of its currency, but on its own terms, Chinese President Hu Jintao told US President Barack Obama.

The two leaders met for about an hour and a half on the sidelines of the ongoing Nuclear Security Summit. Chinese spokesman Ma Zhaoxu characterized the talks as “positive and constructive”.

Ma reported no change in China’s stance on sanctions against Iran; however, a senior US official told reporters after the meeting that China has agreed to join talks on sanctions.

“The Chinese side hopes relevant parties will continue to beef up diplomatic efforts and actively seek effective ways to solve the Iran nuclear issue through dialogue and negotiations,” Ma said.

“China and the US share the same overall goal on the Iranian nuclear issue,” he added.

Hu and Obama met for the fourth time since the US president took office. They met earlier in London, in New York, and during Obama’s visit to Beijing. They last spoke on the phone on April 1.

“Hu said China is determined to push forward reform on the exchange rate …” according to a Foreign Ministry press release issued after the meeting.

“But the decision will be based on the needs of our own economic and social development. Concrete reforms will be considered according to the change of world economy and the situation of China’s economy. (We) especially will not push it forward under outside pressure.”

Hu also warned that revaluation of the yuan will not solve the trade imbalance between China and the United States or the US employment issue, according to the statement.

“We hope that the US can try to expand the export to China, and especially loosen the control in the hi-tech sector,” Hu was quoted as saying.

The US Treasury Department has postponed a scheduled report to the Congress which was expected to name China as a currency manipulator.

Pieter Bottelier, an economist and professor of China Studies of Johns Hopkins University, said Hu’s assurance on revaluation is “the best” the United States could expect.

“President Hu’s assurance to President Obama that China is determined to push exchange rate reform forward on the basis of China’s needs is the best we could expect,” he told China Daily on Monday.

“For obvious reasons, no country can ever publicly announce ahead of time exactly how and when it is going to change its exchange rate,” Bottelier said.

He added that President Hu’s statement may indicate that China will resume implementation of the policy that was first announced in July 2005 but was later suspended in response to the international financial crisis.

“President Hu’s remarks indicate that China will choose its own strategy, pace and rate in terms of the currency appreciation of RMB. This is in line with China’s growing economic power, influence and global interest,” said Li Cheng, Director of Research at the Brookings Institution’s John L. Thornton China Center.

“China should revalue the renminbi and it should do it for the reasons President Hu Jintao gave - revaluation is in China’s best economic interest. It will also help to fulfill the G20 commitment toward global macroeconomic rebalancing, which China endorsed,” added Philip I. Levy, Resident Scholar at American Enterprise Institute

Jeff Bader, National Security Council senior director for Asian Affairs, said after the meeting that President Obama reaffirmed his view that “it is important for a … sustained and balanced global economic recovery that China move toward a more market-oriented exchange rate.”

On Iran, the Chinese spokesman said that China would like to join the US and other nations in the “5+1 mechanism”, which involves Britain, Russia, France, and the UN.

At the UN last week, respresentatives of the 5+1 nations discussed a draft resolution that would sanction Iran’s powerful Revolutionary Guards.

Bader, the top White House official for Asian affairs, told reporters after the meeting that “the two presidents agreed the two delegations should work together on a sanctions resolution in New York “.

“They are prepared to work with us,” he said. “The Chinese very clearly share our concern about the Iranian nuclear program.”

China and Russia are the only two members of the UN Security Council that have not backed sanctions against Iran, but Russia appears to be softening its stance.

Beijing has long insisted sanctions are no use in solving the issue and expected diplomatic efforts to take effect.