REFILE-INTERVIEW-Obama:risk of strains in US, China ties
(Refiles with correct date in dateline)
*To succeed, China, U.S. have to work together-Obama
*He says he will raise currency issue with China
*Also looking for progress on climate ahead of Copenhagen
By Simon Denyer and Caren Bohan
WASHINGTON, Nov 9 (Reuters) - The United States sees China as a vital partner and competitor, but the two countries need to address economic imbalances or risk "enormous strains" on their relationship, President Barack Obama said on Monday.
Three days before leaving for a nine-day trip to Asia, Obama said the world's two most powerful nations need to work together on the big issues, and any competition between them has to be fair and friendly.
"On critical issues, whether climate change, economic recovery, nuclear nonproliferation, it is very hard to see how we succeed or China succeeds in our respective goals, without working together," he told Reuters.
Speaking in the Oval Office, he warned the economic relationship between the two nations had become "deeply imbalanced" in recent decades, with a yawning trade gap and huge Chinese holdings of U.S. government debt.
Obama said he would be raising with Chinese leaders the sensitive issue of their yuan currency -- which is seen by U.S. industry as significantly undervalued -- as one factor contributing to the imbalances.
"As we emerge from an emergency situation, a crisis situation, I believe China will be increasingly interested in finding a model that is sustainable over the long term," he said. "They have a huge amount of U.S. dollars that they are holding, so our success is important to them."
"The flipside of that is that if we don't solve some of these problems, then I think both economically and politically it will put enormous strains on the relationship."
Excessive consumption and borrowing in the United States and aggressive export policies, high savings and lending from Asia fueled a global economic bubble which burst last year.
The United States is trying to persuade China to consume more at home, and buy more U.S. goods in the process, while Washington pledges to save more and borrow less.
Obama said addressing climate change would also be a key part of the talks with his Chinese counterpart Hu Jintao, and added the world's two biggest emitters of carbon dioxide needed to find common ground if global talks on climate change in Copenhagen are to succeed.
"The key now is for the United States and China, the two largest emitters in the world, is to be able to come up with a framework that along with other big emitters like the Europeans and those countries that are projected to be large emitters in the future, like India, can all buy into," he said.
"I remain optimistic that between now and Copenhagen that we can arrive at that framework," he said, adding he would travel to Copenhagen next month if he felt there was a chance of a framework agreement.
"If I am confident that all of the countries involved are bargaining in good faith and we are on the brink of a meaningful agreement and my presence in Copenhagen will make a difference in tipping us over edge then certainly that's something that I will do." Obama said.
Obama, who took office 10 months ago, will be visiting China for the first time. But the trip will mark his third bilateral meeting with China's President Hu.
The Obama administration has sought to build on a policy begun in the Bush administration of encouraging Beijing to take on a higher-profile role in global affairs.
But that comes with the caveat that the United States expects China to use its clout responsibly on issues from the global economy to the Iranian and North Korean nuclear disputes.
One of the clearest signals of the administration's desire to give China and other large, fast-growing economies a bigger role was the decision -- adopted at the Pittsburgh Group of 20 summit in September -- to make the G20 the premier forum for discussing global economic issues.
Obama's Asia trip will take him to Japan, Singapore, China and South Korea. His interview with Reuters lasted 21 minutes.
(Editing by Frances Kerry)
*To succeed, China, U.S. have to work together-Obama
*He says he will raise currency issue with China
*Also looking for progress on climate ahead of Copenhagen
By Simon Denyer and Caren Bohan
WASHINGTON, Nov 9 (Reuters) - The United States sees China as a vital partner and competitor, but the two countries need to address economic imbalances or risk "enormous strains" on their relationship, President Barack Obama said on Monday.
Three days before leaving for a nine-day trip to Asia, Obama said the world's two most powerful nations need to work together on the big issues, and any competition between them has to be fair and friendly.
"On critical issues, whether climate change, economic recovery, nuclear nonproliferation, it is very hard to see how we succeed or China succeeds in our respective goals, without working together," he told Reuters.
Speaking in the Oval Office, he warned the economic relationship between the two nations had become "deeply imbalanced" in recent decades, with a yawning trade gap and huge Chinese holdings of U.S. government debt.
Obama said he would be raising with Chinese leaders the sensitive issue of their yuan currency -- which is seen by U.S. industry as significantly undervalued -- as one factor contributing to the imbalances.
"As we emerge from an emergency situation, a crisis situation, I believe China will be increasingly interested in finding a model that is sustainable over the long term," he said. "They have a huge amount of U.S. dollars that they are holding, so our success is important to them."
"The flipside of that is that if we don't solve some of these problems, then I think both economically and politically it will put enormous strains on the relationship."
Excessive consumption and borrowing in the United States and aggressive export policies, high savings and lending from Asia fueled a global economic bubble which burst last year.
The United States is trying to persuade China to consume more at home, and buy more U.S. goods in the process, while Washington pledges to save more and borrow less.
Obama said addressing climate change would also be a key part of the talks with his Chinese counterpart Hu Jintao, and added the world's two biggest emitters of carbon dioxide needed to find common ground if global talks on climate change in Copenhagen are to succeed.
"The key now is for the United States and China, the two largest emitters in the world, is to be able to come up with a framework that along with other big emitters like the Europeans and those countries that are projected to be large emitters in the future, like India, can all buy into," he said.
"I remain optimistic that between now and Copenhagen that we can arrive at that framework," he said, adding he would travel to Copenhagen next month if he felt there was a chance of a framework agreement.
"If I am confident that all of the countries involved are bargaining in good faith and we are on the brink of a meaningful agreement and my presence in Copenhagen will make a difference in tipping us over edge then certainly that's something that I will do." Obama said.
Obama, who took office 10 months ago, will be visiting China for the first time. But the trip will mark his third bilateral meeting with China's President Hu.
The Obama administration has sought to build on a policy begun in the Bush administration of encouraging Beijing to take on a higher-profile role in global affairs.
But that comes with the caveat that the United States expects China to use its clout responsibly on issues from the global economy to the Iranian and North Korean nuclear disputes.
One of the clearest signals of the administration's desire to give China and other large, fast-growing economies a bigger role was the decision -- adopted at the Pittsburgh Group of 20 summit in September -- to make the G20 the premier forum for discussing global economic issues.
Obama's Asia trip will take him to Japan, Singapore, China and South Korea. His interview with Reuters lasted 21 minutes.
(Editing by Frances Kerry)
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