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"On my part, I remain committed to the process of dialogue. It is my firm belief that dialogue and a willingness to look with honesty and clarity at the reality of Tibet can lead us to a viable solution."

Obama invites China's Hu for state visit

June 29, 2010

June 27, 2010

TORONTO - President Barack Obama has invited
Chinese President Hu Jintao for a state visit, a
U.S. official said Saturday, as the two powers
seek to narrow economic and political differences.

The date of the state visit, which will be only
the third hosted by Obama since he took office in
January 2009, has not been set, White House
adviser Jeffrey Bader told reporters on the
sidelines of a G20 summit in Toronto.

Hu accepted the invitation, Bader added.

The announcement came a week after China began to
address one of the disputes that has bedeviled
their relationship this year, ending the yuan's
da facto peg to the dollar that had been in place since mid-2008.

The United States wants China to allow the yuan
to rise more rapidly to help shrink Washington's
trade deficit. U.S. lawmakers accuse China of
keeping its exports artificially cheap and stealing U.S. jobs.

Obama told Hu he welcomed China's move toward
greater currency flexibility and noted that
Beijing's "implementation of it was very important," Bader said.

"The president stressed the need for balanced and
sustainable growth and the role that China can
play in achieving balanced and sustainable
growth," he said, adding that Obama also called
for a level playing field on trade.

Hu also extended a hand of cooperation to Obama
in their meeting, saying China sought a closer
relationship with the United States and that the two had already moved closer.

"We also want to strengthen the communication and
coordination with the United States on major
regional and international issues," he said.

The official Xinhua news said Hu told Obama that
China had no intention of pursuing a trade
surplus with the United States and had been
actively increasing its imports from America.

Hu called on the United States to refrain from
protectionism and to gradually reduce barriers to
high-tech exports to China in order to achieve
"healthy and balanced bilateral economic and
trade relations," according to Xinhua.

China and the United States should stick to the
principle of dealing with trade frictions through
dialogue on an equal footing, Xinhua quoted the Chinese president as saying.

Hu said the world economy faced uncertainty and
potential instability despite the unfolding recovery.

"The European sovereign debt issue is a cause for
concern and the world cannot afford to
underestimate its impact on global economic
recovery," Xinhua paraphrased Hu as saying.


In a separate briefing on the sidelines of the
summit, Chinese officials served up a reminder
the world's third-largest economy resents being pressured to change policy.

Zhang Tao, a director-general in the central
bank, said China made the decision to enhance the
flexibility of the yuan's exchange rate for
itself, based on its own economic needs.

But U.S. Treasury Secretary Timothy Geithner
praised China's move on the yuan and said its
leaders were taking the right steps in trying to
reduce reliance on export-led growth.

"If you look at what China is doing, growth in
China now is much more driven by consumption and
domestic demand than it has been in the past," he said.

Even if the Obama administration and Beijing seem
to have put the worse of the currency dispute
behind them, other irritants in their relationship remain acute.

U.S. Defense Secretary Robert Gates has said
China's decision to break off
military-to-military contacts this year could undercut regional stability.

China broke off the contacts after the Obama
administration notified Congress in January of a
plan to sell Taiwan up to $6.4 billion worth of arms.

The United States has also criticized China's
Internet censorship, while Beijing has denounced
Obama's meeting with the Dalai Lama, Tibet's exiled leader.

Obama has put a priority on mending fences with
China, which his administration sees as important
given Beijing's increasing economic clout and
Washington's desire for its cooperation on
foreign policy issues such as Iran and North Korea.

(Reporting by Caren Bohan and Patricia Zengerle;
Additional reporting by Alister Bull and Simon
Rabinovitch and Alan Wheatley in Beijing; Editing by Ron Popeski)
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