President Barack Obama said he told visiting Chinese President Hu Jintao on Wednesday that China's currency is undervalued and should be increasingly driven by markets.
Obama used his opening statement at a joint news conference to address one of the major disputes between the two countries — Washington's contention that China's yuan is not fairly valued and is hurting the U.S. economy as a result.
Obama returned to the topic later in response to a question from a reporter.
"I told President Hu that we welcome China's increasing the flexibility of its currency. But I also had to say that the renminbi (yuan) remains undervalued, that there needs to be further adjustment in the exchange rate," he said.
Obama said he told Hu that changing the yuan policy "can be a powerful tool for China boosting domestic demand and lessening the inflationary pressures in their economy."
"So we'll continue to look for the value of China's currency to be increasingly driven by the market, which will help ensure that no nation has an undue economic advantage," he said.
But Obama said later that the currency was just part of the broader U.S.-China economic relationship.
"The currency is a part of the problem. The renminbi is undervalued. The Chinese government has intervened very forcefully in the currency markets," Obama said, calling that an indication the yuan is undervalued.
He acknowledged Hu's concern about disruption in the export market from overly rapid currency movements but said he was confident of progress toward a market-based yuan.
Hu said the two leaders discussed disagreements on economic issues and trade.
© 2023 Thomson/Reuters. All rights reserved.