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Hu Jintao, U.S. Lawmakers Meet In Bid To Improve Relations

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HU JINTAO
AP

WASHINGTON (Reuters) - U.S. lawmakers pressed Chinese President Hu Jintao on North Korea and human rights on Thursday, while Vice President Joe Biden said the Chinese understand they must work on the currency dispute that is a major irritant between the world's top two economies.

President Barack Obama urged Hu on Wednesday to let the value of the yuan rise against the dollar but the Chinese leader said nothing on the issue in several public appearances in Washington.
Biden said "significant discussions" in private about the yuan with Hu's delegation were more promising.

"They indicate that they understand that -- that they have to work on it," he said. Asked whether Hu made any commitments, Biden replied: "Nothing specific."

In morning meetings on Hu's final day in Washington, members of Congress zeroed in on human rights and trade to underscore the huge gaps between Beijing and Washington.

"Chinese leaders have a responsibility to do better and the United States has a responsibility to hold them to account," said John Boehner, the new Republican speaker of the House of Representatives.

Analysts have called Hu's four-day state visit the most significant by a Chinese leader in 30 years given China's growing military and diplomatic clout. But it comes at a time of strains over everything from economic policy and climate change to the nuclear ambitions of North Korea and Iran.

Lawmakers said they urged Hu to take a stronger line on North Korea, hoping to use Beijing's influence over Pyongyang to ease tensions on the Korean peninsula and resume aid-for-disarmament talks.

After a series of business deals were announced this week, Hu continued his courtship of U.S. companies with a speech describing the benefits of cooperation before he traveled to Chicago, where more agreements were expected to be announced.

Underlining China's importance to the global economy, data on Thursday showed its annual growth quickened in the fourth quarter of last year to 9.8 percent, defying expectations of a slowdown.

"SUBSTANTIALLY UNDERVALUED"

As U.S. voter anger simmers with unemployment riding above 9 percent, lawmakers have threatened new tariffs to punish Beijing for policies that critics say undervalue the yuan by up to 40 percent against the dollar.

The policies make China's exports artificially cheap, the critics charge, and contribute to a trade gap that Washington puts at $270 billion.

In the past week, China's central bank has repeatedly set the mid-point for the yuan at record highs in keeping with a policy of strengthening it during important diplomatic events. But China has resisted demands for faster appreciation.

While House lawmakers skipped the currency question in their meeting with Hu, Senate Majority leader Harry Reid did raise it with the Chinese leader, an aide said.

And the U.S. Treasury maintained the pressure, with Assistant Treasury Secretary Charles Collyns saying Beijing has kept the yuan "substantially undervalued."

Obama spoke forcefully about the yuan in a news conference with Hu on Wednesday but the comments by Collyns were the sharpest public criticism of China's currency policies during Hu's visit.

Rick Larsen, the Democratic co-chairman of the bipartisan U.S.-China Working Group in the House, said China must get serious about improving U.S. access to its huge domestic market and allowing the yuan to rise.

"This puts U.S. companies at a disadvantage and unfairly tilts the playing field toward domestic Chinese companies," he said in a statement.

But Representative Kevin Brady, chairman of the trade subcommittee of the House Ways and Means Committee, said he and other Republicans intend to focus on engaging with China on a broad range of trade issues, not just the currency dispute.

Currency is "not the silver bullet that many make it out to be and, for many American businesses trying to compete to win in China, not only is it not helpful, it distracts from tearing down other barriers that would provide us U.S. jobs," Brady told Reuters in a telephone interview.

"PATH OF PEACEFUL DEVELOPMENT"

Hu told the U.S.-China Business Council on Thursday that cheap Chinese exports had saved American consumers $600 billion over the past decade and described hopes for a richer partnership -- while avoiding mention of human rights or the currency issue.

"Our two countries have never enjoyed such broad common interests and shouldered such broad common responsibilities as they do today," Hu said, adding that China "will unwaveringly take the path of peaceful development."

In a cautious speech that seemed designed to assuage U.S. concerns about China's military, Hu said Beijing sought a "win-win" economic relationship with the United States.

State media in China lapped up the pomp of the visit but largely avoided mention of the rare news conference by the two presidents, where Hu was peppered with questions about the yuan and human rights.

Beijing residents said BBC and CNN broadcasts of the summit went blank when questions moved to human rights and anti-Chinese protesters, although access to foreign news channels is limited to upscale hotels and apartment complexes.

Newspapers splashed photos of Hu with Obama across their front pages, with headlines touting a "new chapter in relations" after China agreed to buy $45 billion worth of U.S. goods in deals that seemed aimed at quelling anti-Chinese sentiment in the United States.

Neither Boehner nor Reid attended Wednesday's White House dinner for Hu, who was called "a dictator" by the Senate majority leader in an interview this week. Senate Republican leader Mitch McConnell skipped the Hu visit entirely.

Senator John McCain, the 2008 Republican presidential candidate, and former Democratic House speaker Nancy Pelosi led the effort to put pressure on Hu over human rights in their meetings, congressional aides said, illustrating the bipartisan nature of concern over China's record.

"The U.S. and China do not share values and principles as some have claimed in recent days," House Foreign Affairs Committee Chairman Ileana Ros-Lehtinen said in a statement.

(Writing by Andrew Quinn; Additional reporting by Steve Holland, Rick Cowan, Susan Cornwell, Mark Felsenthal and Paul Eckert in Washington, Sui-Lee Wen, Kevin Yao, Ben Blanchard, Sabrina Mao and Michael Martina in Beijing and Chen Yixin in Shanghai; Editing by John O'Callaghan)

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