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US and Chinese leaders vow to work together on range of issues

Text by FRANCE 24

Latest update : 2009-11-17

US President Barack Obama and his Chinese counterpart, Hu Jintao, say they have agreed to work together on pressing issues ranging from climate to nuclear proliferation, but tensions remain on the thorny topic of trade.

US and Chinese leaders met in Beijing on Tuesday for talks on how to tackle some of the toughest global issues, including bilateral trade disputes, how to deal with climate change and stemming the spread of nuclear weapons.

At a news conference following talks between US President Barack Obama and Chinese President Hu Jintao at the Great Hall of the People in the Chinese capital, the two leaders said they agreed that Iran had a responsibility to act in accordance with international non-proliferation efforts.

"We agreed that the Islamic Republic of Iran must provide assurances to the international community that its nuclear programme is peaceful and transparent,” Obama told reporters. The US president went on to say that Iran now had a chance to assuage fears over its nuclear ambitions before warning of “consequences” if it failed to do so.

Hu agreed that stemming the spread of nuclear weapons was a common goal, but emphasised the need to achieve this through diplomacy and dialogue. “We both stressed that to uphold the international nuclear non-proliferation regime and to appropriately resolve the Iranian nuclear issue through dialogue and negotiations is very important to stability in the Middle East and in the Gulf region,” Hu said.

The International Atomic Energy Agency warned on Monday that Iran may be hiding additional nuclear plants and said Tehran was not meeting its nuclear obligations.

The US and Chinese leaders extended their common ground to tackling North Korea’s nuclear ambitions. FRANCE 24 correspondent Henry Morton in Beijing said discussions on the issue were “very positive”, with both sides pledging to work towards a nuclear-free North Korean peninsula by urging Pyongyang to return to the stalled six-party talks.

Obama told the news conference that China and the United States – which together account for 40 percent of carbon dioxide emissions – had additionally “agreed to work toward a successful outcome” at a crucial UN-backed December climate change summit in Copenhagen.

Trade tensions

But differences persist over the US insistence that China revalue its currency. At the heart of a continuing trade dispute between the two countries is the issue of an undervalued yuan, the principal unit of the Chinese currency, the renminbi (RMB). The yuan appreciated more than 20 percent between 2005 and 2008, piling the pressure on US exporters as they struggled to compete with Chinese manufacturers.

At the start of the financial crisis China pegged its currency to the dollar to help keep exports high as the global economy sank into financial crisis. China has since accused Washington of protectionism as it introduced measures to boost manufacturing, including slapping tariffs on Chinese-made tyres in September.

Beijing, for its part, has its own complaints about US monetary policy. As the single-largest holder of US foreign currency reserves, whose holdings are worth some $2.1 trillion, China has a vested interest in seeing that the US dollar remain strong. Beijing has in the past criticised Washington’s loose fiscal policy of devaluing the US currency.

The managing director of the International Monetary Fund (IMF), Dominique Strauss-Kahn, threw his weight behind a revaluation of the yuan in comments he made on Tuesday.

“We do believe firmly at the IMF that the RMB is undervalued and that it is not only in the interests of the global economy, but also in the interests of China to have a
revaluation of the currency,” he said.

But even such thorny fiscal issues didn’t seem to undermine all the goodwill in Beijing. Obama said he welcomed China’s recent indications that it is is willing to let the yuan “move towards a market-oriented exchange rate over time”.

In a joint statement, Obama and Hu pledged that they "recognise the importance of open trade and investment to their domestic economies and to the global economy, and are committed to jointly fight protectionism".

Date created : 2009-11-17

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