This past weekend at the East Asia Summit in Bali, U.S. President Barack Obama met briefly with China's Premiere Wen Jiabao (温家宝). Although the meeting was brief and somewhat informal, the main concern expressed by Obama was his belief that China should adjust the value of its currency. As the 2012 presidential election in America approaches and the U.S. economy continues to stagnate, Obama has been taking a slightly more critical role of China.
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| Obama and Wen Jiabao look friendly while meeting in Bali |
Many Americans belive that China is partly responsible for some of America's economic woes, especially increasing unemployment. This obviously puts pressure on Obama, who is running for reelection, to take a tough stance against anything that appears to be a threat to American jobs.
China, however, contends that America's economic problems are not its fault and that adjusting the value of the yuan would not have a significant affect in solving those problems. Last week, at the Asia-Pacific Economic Cooperation Summit held in Hawaii, Obama angered many Chinese when he met with Chinese President Hu Jintao and made critical remarks about China's economic policy. Not surprisingly, President Hu replied that even a big rise in the yuan would not help the U.S. and that the U.S. should stop blaming China for its trade deficit and increased unemployment.
While the Chinese yuan is probably artificially undervalued to some extent, it is naive to think that this is a major reason for America's economic problems. While its easier to blame a foreign country such as China for its ailing economy, I think much more of the blame lies at home which many Americans are still unwilling to admit.
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