Bush, Hu find no breakthroughs on trade, Iran

Top News Article | Reuters.co.uk

By Steve Holland and Tabassum Zakaria

WASHINGTON (Reuters) - President George W. Bush failed to win a commitment from Chinese President Hu Jintao on Thursday on immediate steps to reduce China's $202 billion trade surplus with the United States.

Hu did give Bush a general assurance he was working to make the Chinese currency more "flexible" but this fell far short of U.S. demands for a dramatic revaluation of the yuan as a way to make U.S. products more competitive in Chinese and global markets and reduce the trade imbalance.

The two leaders also failed to bridge differences over how to deal with Iran's nuclear ambitions. Bush wants China to agree to tougher U.N. Security Council action, but his arguments did not persuade Hu.

Speaking in the Oval Office, the two leaders said their bilateral relationship had matured and they could discuss differences openly. "He tells me what he thinks, and I tell him what I think, and we do so with respect," Bush said.

Covering human rights concerns, Bush complained about China's recent expulsion of a North Korean woman seeking asylum.In a rarity, Hu answered reporters' questions in the Oval Office and U.S. officials saw progress in the communist leader's comment that "if there is no democracy, there will be no modernization" of China.

Stating that China wanted to boost its domestic demand and did not seek an excessive trade surplus, Hu vowed to do more to stop the illegal piracy of American-made software and DVDs, but said Washington could help reduce the imbalance by allowing more high-tech exports to China.

Bush, under pressure to reduce last year's $202 billion trade deficit with China, said he hoped China would do more to revalue its currency, the yuan, which Washington considers seriously undervalued against the dollar.

Hu said China would continue to improve the yuan's exchange rate, although he gave no specifics. But on Wednesday, he ruled out any dramatic revaluation of the currency.

"America needs a tiger, not a pussycat, fighting for our American companies and American workers," said Michigan Gov. Jennifer Granholm, whose state has been hard hit by job losses.