Friday, December 09, 2005

WASHINGTON (Reuters) -- U.S. President George W. Bush has ratcheted up pressure on China on to do more to allow the yuan to appreciate and said the trade imbalance between the two countries was "bothersome."Speaking before a four-nation trip to Asia, Bush said revaluation of China's yuan in July was a "a strong step forward" but he plans to discuss his hopes for more currency flexibility in meetings with Chinese President Hu Jintao."I will remind him that this government believes they should continue to advance toward market-based evaluation of their currency, for the sake of the world, not just for the sake of bilateral relations," Bush told a roundtable with Asian journalists."The trade balance between China and the United States is bothersome to people here," added Bush, who urged greater access for U.S. businesses to China's markets.Before attending the November 18-19 Asia-Pacific Economic Cooperation summit in South Korea, Bush will visit Kyoto, Japan. After APEC, he will go to Beijing and then on to Mongolia.The comments on China's currency system came as traders on foreign exchange markets speculate China might allow the yuan to appreciate more in the period surrounding Bush's visit.The United States has led the call for China to liberalize its currency system and let the yuan rise in value as politicians and business lobby groups complain it has been kept at too low a level.They have argued that has made Chinese products artificially cheap and exacerbated global trade imbalances.Gradual flexibilityIn July, after some two years of intense speculation in markets of a currency adjustment, China revalued the yuan by 2.1 percent, scrapped an 11-year-old peg to the dollar and said it would allow its currency to appreciate as much as 0.3 percent per day against the dollar.But since then the yuan has moved little, rising a total of about 0.3 percent against the U.S. dollar over three months.Chinese officials have repeatedly said they will allow greater yuan flexibility but only gradually.Bush and Hu last met on the sidelines of the United Nations summit in September. Hu had been scheduled to visit Bush at the White House in early September but the meeting was postponed because of Hurricane Katrina's aftermath.Bush said that he and Hu had a "very good" personal relationship but described Sino-American relations as "mixed."Bush said he hoped at the APEC meeting to place "a strong focus on intellectual property rights throughout the world" as well as the need for further discussions about cooperation on energy issues."China is a vast, significant, growing economy that is -- using more and more energy. And here is an area where all of us can work together -- and that is on how to share technologies and use technologies in such a way that we become less dependent on hydrocarbons," Bush said.He said he plans to emphasize on the Asia trip the importance of making progress at the World Trade Organization's Doha round of trade talks in Hong Kong in December. (Ministers may delay deadline)Preparations to deal with a possible bird flu pandemic were also among the issues Bush said he wanted to raise with Hu and other Asian leaders."I'll bring it up again, because I am concerned about a pandemic -- and I'm not suggesting it's going to break out in any country. But if it were to break out anywhere in the world, it becomes an international issue," he said.Earlier, the United States and China said they had reached agreement on reining in China's booming clothing and textile shipments to the United States until 2008. U.S. Trade Representative Rob Portman and Chinese Commerce Minister Bo Xilai announced the deal at a joint news conference in London on Tuesday and hailed it as a success for both sides. (Full story)Copyright 2005 Reuters. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.

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