13 Mar 2010

Obama urges China to relax grip on its currency

10:26 am on 13 March 2010

US President Barack Obama has urged China to change its currency strategy to help re-balance the global economy.

In a speech in Washington, Mr Obama said China should move to a "more market-based exchange rate" so that US exporters are not disadvantaged.

US manufacturers have complained that the yuan is being kept artificially low, making imports to China dearer.

Mr Obama's comments risk upsetting Beijing, which regards currency issues as an internal matter.

Export aim

Mr Obama has reiterated plans to double exports over the next five years to boost the ailing American economy. The country's trade deficit figures unexpectedly shrank in January, reflecting a big drop in imports of oil and cars.

Exports also fell, a potential blow to hopes that an economic recovery this year will be aided by US sales abroad.

Mr Obama says that helping US companies to sell their goods and services abroad will create new jobs in the American workforce.

Big business in the US has told the President to get tougher with China on trade and currency issues, the BBC reports

Analysts say the goal will not be achieved until China revalues its currency or reduces its barriers to US exports.