Obama sets off for Asia tour

US president expected to focus on economic links with China during nine-day visit.

    The trade gap between the US and China has been driven in part by cheap Chinese exports [Reuters]

    Obama is likely to discuss with Asian leaders the US's deepening trade deficit with China, as well as climate change, the North Korean and Iranian nuclear disputes.

    He will meet Yukio Hatoyama, Japan's prime minister and Emperor Akihito on Friday, before heading to Singapore on Saturday to meet regional leaders at Asia Pacific Economic Co-operation (Apec) summit.

    On Sunday evening, Obama heads to China for a three-day visit which will include talks with President Hu Jintao and Wen Jiabao, the Chinese prime minister. His final stop will be South Korea.

    Economic imbalances

    The US president told the Reuters news agency this week that although China is a "vital partner, as well as a competitor" to the US, "enormous strains" between the countries could occur if economic imbalances between them are not corrected.

    "He [Obama] understands that the future of our prosperity and our security is very much tied to this part of the world"

    Ben Rhodes,
    deputy national security adviser for strategic communications

    Excessive consumption and borrowing in the US, backed up by China's export strategy and its purchases of US debt, are considered by many economic analysts as a major cause of a severe economic bust, following years of rapid growth in the global economy.

    Obama is expected during his trip to call for engagement with the Asia-Pacific region, an area of the world where he has personal connections, having grown up in Hawaii and Indonesia.

    "The president is the first president of the United States really with an Asia-Pacific orientation," Ben Rhodes, the deputy national security adviser for strategic communications, said.

    "He understands that the future of our prosperity and our security is very much tied to this part of the world."

    Obama has said that he would appeal to Beijing about revaluing the yuan, the Chinese currency.

    He also said that he will ask Chinese leaders to encourage their people to spend more and widen US access to profitable Chinese consumer markets.

    Export opportunities

    The Obama administration is looking to boost opportunities to export US goods, in order to tackle a US unemployment rate that now stands at 10.2 per cent.

    China gave a signal on Wednesday that it may allow appreciation of its currency, saying that it would consider a basket of currencies - not only the US dollar - in guiding the yuan's exchange rate.

    Rising budget deficits have weakened the dollar due to US borrowing to meet the country’s day-to-day spending needs.

    The dollar has declined against a basket of major currencies since mid-February.

    US manufacturers have expressed concerns that Beijing is artificially holding down the yuan's value to make Chinese exports cheaper and US goods more costly for China.

    The Asia tour comes as Obama juggles several domestic issues, including his attempt to pass healthcare reform and climate change legislation.

    He is also considering whether to send more thousands of US troops to Afghanistan against resurgent Taliban and al-Qaeda fighters.

    SOURCE: Agencies


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