Plenty to agree on, but many issues for US and Chinese presidents

Published on Wednesday 19 January 2011 15:49

US PRESIDENT Barack Obama and his Chinese counterpart Hu Jintao yesterday vowed to work for closer co-operation on critical issues ranging from increasing trade between the world's two largest economies to fighting terrorism. But they also stood fast on their countries' differences, especially over human rights.

• US visit: Hu Jintao

Mr Obama acknowledged that differences on rights were "an occasional source of tension between our two governments".

Welcoming Mr Hu to the White House, Mr Obama hailed the event as a chance to demonstrate that the world's two biggest economic powers "have an enormous stake in each other's success".

He said: "Even as our nations compete in some areas, we can co-operate in others. Let us seize these possibilities together."

Mr Hu was greeted with a 21-gun salute, a guard of honour and the playing of both national anthems in a show meant to convey recognition of China's growing international stature.

The ceremony went off without a hitch. The last time the Chinese president came to Washington, during the Bush administration in 2006, the arrival ceremony was marred by heckling from a protester from the Falun Gong spiritual sect who had infiltrated the event.

At a joint news conference, Mr Obama wasted little time on bringing up one of the most sensitive topics between the nations, saying: "We have some core views as Americans about the universality of certain rights: freedom of speech, freedom of religion, freedom of assembly."

He said he drove that home forcefully in his discussions with Mr Hu, but "that doesn't prevent us from co-operating in these other critical areas".

• Analysis: The delicate balancing act between harmony and hard policies

Mr Hu said China is a developing country with an enormous population facing challenges in economic and social developments and that human rights must be viewed under those circumstances. But he said that China will continue efforts to "improve the lives of our people and promote democracy and rule of law".

Beijing caused anger in the West recently by refusing to release jailed Nobel Peace Prize winner Liu Xiaobo, a political activist whose main "crime" was proposing an alternative to China's one-party political system.

In a sign of the growing economic bonds between the two superpowers, Mr Obama said the countries had made business deals that would mean $45 billion in new US exports.He also said China was taking significant steps to curtail the theft of intellectual property and expand foreign investment.

Mr Obama said China had become "one of the top markets for American exports" and that these exports have helped to support about 500,000 US jobs.

Mr Hu said he and his US counterpart had agreed to "share expanding common interests".

Mr Obama said he had told Mr Hu that China's currency is still undervalued, making Chinese imports cheap and foreign goods more expensive in China, a view shared by Europe and even Brazil.

"I told President Hu that we welcomed China's increasing the flexibility of its currency," Mr Obama said. But he added that the yuan "remains undervalued, that there needs to be further adjustment in the exchange rate, and that this can be a powerful tool for China boosting domestic demand and lessening the inflationary pressures in their economy".

Mr Hu said both countries should "respect each other's sovereignty, territorial integrity and development interests".

Mr Obama said: "I absolutely believe China's peaceful rise is good for the world, and it's good for America."

The US president also said that he and Mr Hu "agreed that North Korea must avoid further provocations" and that international sanctions on Iran must be fully enforced.

Mr Hu said China "will work with the United States and other countries to effectively address global challenges such as meeting the climate challenge, terrorism, transnational crime, energy and resource security, food security, public health security and serious national disasters".

During the trip, Mr Hu is likely to raise his worries about US economic and security policies, including arms sales to Taiwan, the self-ruled island that China deems a breakaway province.

Later, the two leaders attended a state dinner given in the Chinese premier's honour.

Among the guests were the Chinese-American mayors of San Francisco and Oakland, Edwin Lee and Jean Quan, and energy secretary Steven Chu.