U.S. President Barack Obama on Tuesday urged a reluctant China to let its yuan currency rise in value at a summit where strains over trade between the two giants crept into proclamations of goodwill.

Standing beside Obama after their summit, Chinese President Hu Jintao avoided mentioning the yuan or the dollar.

Instead, Hu emphasized during a joint media appearance the need to avoid trade protectionism in a thinly veiled reference to China's irritation over new U.S. tariffs on Chinese-made tires, steel pipes and other products.

With the U.S. unemployment rate at 10.2 percent, one of Obama's top priorities during his three-day trip to China is pressing Beijing over the huge trade imbalance between the two countries, a move he believes would pave the way for greater U.S. export opportunities.

Washington argues that an undervalued yuan is putting U.S. manufacturers at a disadvantage and stoking global economic imbalances.

I was pleased to note the Chinese commitment made in past statements to move toward a more market-oriented exchange rate over time, Obama said as Hu stood next to him on a podium with three Chinese and three U.S. flags in the background.

Obama said movement by China on its exchange rate would make an essential contribution to the global rebalancing effort.

But his reference to China's past statements on currencies indicated Hu might not have been forthcoming on how Beijing might respond.

Hu said the two leaders talked of the need to keep in close contact on macroeconomic and financial policies and continue to consult, on an equal footing, to properly resolve and address economic and trade frictions.

I stressed that under the current circumstances, we need to oppose all kinds of trade protectionism even more strongly, Hu said.

Sun Zhe, director of the Center for U.S.-China Relations at Tsinghua University in Beijing, said Hu's silence on the currency may stem in part from a reluctance by China to be seen making policy concessions under foreign pressure.

I personally think that there may be some slight, symbolic adjustment on exchange rate policy after Obama leaves, but not during the visit itself, said Sun.

But don't expect much. China believes that the main problem is not the weakness of the yuan but the weakness of the dollar. The feeling here is, 'Why should we be the scapegoat for your dollar problems?

The issue of currencies has sparked testy exchanges in recent days between U.S. and Chinese officials.

China's Commerce Ministry on Monday rebuffed calls for the yuan to appreciate, signaling resistance to change a controversial foreign exchange policy.

Outside pressure has been building on Beijing to let the yuan rise after more than a year of it being nearly frozen in place against the dollar, with the latest appeal voiced by the head of the International Monetary Fund on Tuesday.

China's central bank last week tweaked its description of how it manages the currency, setting off a firestorm of speculation that it might be willing to give the yuan some room to run, although market expectations of appreciation have remained muted.

Investors betting the yuan will soon rise may be disappointed as Beijing is likely to keep the currency on a tight leash at least until mid-2010 to cement China's economic recovery, analysts say.

SEEKING TO DEFUSE DISPUTES ON NORTH KOREA, IRAN

In addition to discussing economic issues, the two leaders discussed North Korea and Iran, and promised to cooperate on fighting global warming.

The Chinese leader said both sides saw signs of a global economic recovery but noted there was some way to go.

In a joint statement released after the summit, they said they were determined to work together to achieve more sustainable and balanced global economic growth, echoing the position of the G20 on ironing out dangerous imbalances.

Hu expressed appreciation that Obama, who arrived in China on Sunday night, had welcomed a strong, prosperous and successful China that plays an even greater role on the world stage.

Obama said he told China that all minorities should enjoy human rights and urged China to resume talks with representatives of the Dalai Lama, Tibet's exiled spiritual leader.

Obama did not meet the Dalai Lama when he was in Washington in early October. But the Dalai Lama has said they may meet after Obama returns from China, which condemns the Buddhist monk as a separatist for demanding Tibetan self-determination.

Chinese media have avoided fawning over Obama, in contrast to the effusive receptions he has received in Europe. Several websites deleted comments championing Internet freedom that he made at a town hall talk with students in Shanghai on Monday.

Trade ties have surged since China opened up to the world and introduced market reforms in the late 1970s after decades of virtual isolation under Mao Zedong, founder of communist China.

But that has sparked tensions because of a surplus in China's favor. Chinese exports to the United States were $337.8 billion in 2008 compared with U.S. exports to China of $69.7 billion.

(Additional reporting by Chris Buckley and Lucy Hornby; Writing by Ben Blanchard, Editing by Ken Wills and Dean Yates)

Barack obama China