Obama's Call to the Chinese President, Decoded
By Glenn Kessler
President Obama called Chinese President Hu Jintao today, and both the White House and the official New China news agency put out statements describing the call. But neither statement addressed the burning issue of the day: Did Obama try to explain the statement from his Treasury Secretary that Obama believes China is a currency manipulator?
That statement was buried in lengthy written answers Timothy Geithner provided for his confirmation hearings. It generated a firestorm, and Chinese officials responded with annoyed comments.
The official statements on the calls issued by the two governments, carefully written given the sensitivity of the relationship, provide only a few clues.
In the Chinese version, there is this line: "Hu said the core interest of either country should be respected by each other and taken into consideration." In other words: no insulting comments about our currency exchange rate, please.
The Chinese account also quotes Obama as saying that "Sino-U.S. [are] the most important bilateral relations for both side" -- a comment that might surprise the British and the Japanese.
Obama is further quoted as saying "enhancing bilateral constructive dialogue and cooperation is in the interest of not only the two countries themselves, but the world at large."
Moreover, Obama was said to have added: "It is crucial for the United States and China, the two most important economies, to enhance cooperation."
Note the phrase: "bilateral constructive dialogue" and the word "cooperation." It's hard to do such things if one country is insulting the other.
The White House statement is even more opaque, but it has one interesting passage: "President Obama stressed the need to correct global trade imbalances as well as to stimulate global growth and get credit markets flowing."
U.S. officials have long pressed China to let its currency, the yuan, grow stronger, which could increase the price of Chinese exports and reduce China's trade surplus.
So when Obama is speaking of "global trade imbalances" -- a point the White House noted he "stressed" -- that means he is really saying that China's currency is too weak and the government needs to do something about it.
In other words, stop manipulating it. Or at least manipulate it the way Washington wants.
Posted at 5:32 PM ET on Jan 30, 2009
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