Obama presses China's Hu on currency, rights

President Barack Obama pressed Chinese President Hu Jintao on Wednesday to let the value of China's currency rise and delivered a stern message on U.S. concerns over Beijing's human rights record.

Both leaders spoke glowingly about cooperation but made no major breakthroughs on a range of disputes over trade and security that have strained relations over the past year.

Hu was greeted with a 21-gun salute and an honor guard, but frictions showed through beneath the pomp of the state visit.

At a sometimes awkward White House news conference marred by translation difficulties, Obama said he was very candid with Hu about respecting human rights, and reiterated that Beijing was not moving fast enough to strengthen the yuan.

Hu was quiet on the currency and initially did not respond to a reporter's questions on human rights, but later said he had not heard properly because a problem with the translation. He later conceded China had much to do on the rights question.

Economic issues took up about half of the bilateral talks between the two leaders, said a U.S. official who spoke on condition of anonymity.

Hu gave up little aside from $45 billion in export deals that seemed aimed at quelling anti-Chinese sentiment in the United States and allowing Obama to tout job creation as U.S. unemployment remains stubbornly above 9 percent.

Although that price tag looked impressive, the amount was spread out over several years and it was unclear how much of it included previously negotiated deals.

We've shown that the United States and China, when we cooperate, can receive substantial benefits, Obama said with Hu at his side at the White House news conference.

We want to sell you all kinds of stuff, the U.S, president said, drawing laughter from the packed room.

UNDERVALUED YUAN

But Obama zeroed in quickly on one of the most sensitive disputes between the world's two biggest economic powers, telling Hu that China's yuan remains undervalued. Beijing's critics say its currency practices hurt the competitiveness of U.S. business by making its exports artificially cheap.

There needs to be further adjustment in the exchange rate, Obama said bluntly.

Hu listened to Obama's complaints about the yuan but pointedly did not reply, giving no clues about China's intentions on the hot-button issue.

The yuan has risen about 3.7 percent against the dollar since June, when China loosened its grip on the currency. Because of China's high inflation, the effective exchange rate has appreciated by considerably more.

Doug Smith, an analyst with Standard Chartered Bank in New York, said China doesn't respond well to outside pressure, so Obama's tough talk may have been aimed at a domestic audience.

I think for internal (U.S.) consumption you have to make some noise, Smith said. I don't think it matters much in practical terms. Many other things matter more than the exchange rate.

Obama pointed to two areas where some small progress was made -- access to Chinese government procurement contracts for U.S. companies and intellectual property protections.

HUMAN RIGHTS

Obama took a more assertive stance on human rights than he did during his 2009 visit to Beijing, when critics at home said he was too deferential to his hosts. Still, he was measured in his words to avoid antagonizing China's communist leadership.

I repeated to President Hu we have some core views as Americans about the universality of certain rights, freedom of speech, freedom of religion, freedom of assembly, that we think are very important and that transcend cultures, he said.

I have been very candid with President Hu about these issues, he added.

Hu responded that China as a developing country would continue to improve the lives of its people. China still faces many challenges in economic and social development, and a lot still needs to be done in China in terms of human rights, he said, although he gave no specifics.

Obama urged Chinese dialogue with representatives of the Dalai Lama, the Tibetan spiritual leader widely admired internationally but regarded by Beijing as part of an illegitimate separatist cause.

Mary Beth Markey, president of the International Campaign for Tibet, said Obama said exactly what we wanted him to say on Tibet, adding that the two must have had a blunt private discussion if Obama was willing to comment on it publicly.

Hu can expect even more pressure on human rights and the currency when he visits U.S. lawmakers on Thursday.

In an apparently effort to soften its image among average Americans, China launched a public relations blitz this week, with a promotional video playing on giant screens in New York's Times Square and on CNN to coincide with Hu's visit.

NORTH KOREA - IRAN

Obama said he and Hu agreed that North Korea must avoid further provocations and that U.N. sanctions on Iran must be fully enforced. Washington has sometimes chided Beijing for not doing enough to help rein in Tehran and Pyongyang, whose nuclear ambitions worry the United States and its allies.

In a joint statement, Obama and Hu appeared to set aside recent rancor over North Korea, which caused alarm with the shelling of a South Korean island and claims of new nuclear advances. But it offered no new ways to contain Pyongyang.

On the yuan, China said in the statement that it remained committed to reforming its exchange rate policies and agreed to seek ways to create more balanced trade flows. So far it has resisted demands for faster appreciation, a move that could help lower China's trade surplus with the United States, which Washington puts at $270 billion.

Congressional pressure is building for legislation to punish Beijing over its trade and currency policies. A group of 84 lawmakers urged Obama in a letter on Wednesday to tell Hu that America's patience is near an end.

Welcoming Hu in a carefully choreographed ceremony, Obama hailed the event as a chance to demonstrate that the countries have an enormous stake in each other's success.

Speaking later to a group of U.S. and Chinese business leaders, Obama pressed for a level playing field with China on trade, while Hu made the same appeal for Chinese companies operating in the United States.