Obama Meets China Vice President Xi Jinping

President Barack Obama told Chinese Vice President Xi Jinping that China’s growing influence brings with it responsibility to work toward “balanced” trade and to recognize the aspirations of all people for greater rights.

Obama met today with the man who is in line to become China’s top leader next year as both nations seek to ease tension over trade imbalances and China’s currency valuation. The U.S. also is prodding China toward greater cooperation on confronting the regime in Syria as well as thwarting Iran’s pursuit of a nuclear weapon.

Vice President Joe Biden openly criticized some China policies even as he welcomed Xi at a State Department luncheon following meetings at the White House.

Addressing Xi before a guest list of lawmakers from both parties and U.S. business executives, Biden said the U.S.-China business relationship can only work “if the game is fair.” Biden said the U.S. “strongly disagreed” with China’s veto with Russia of a United Nations resolution against Syria on Feb. 4.

Xi, through an interpreter, said the U.S.-China relationship will grow through dialogue and “not protectionism.” Obama, in his late morning meeting with Xi in the Oval Office of the White House, said the U.S. welcomes “China’s peaceful rise” and that he expected relations between the world’s two biggest economies will continue on a “cooperative track.”

Increased Responsibility

“With expanding power and prosperity also comes increased responsibility,” Obama said, citing need for a “balanced trade flow” and “recognizing the aspirations and rights of all people.”

Xi said he wants to “deepen mutual understanding” and cooperation with the U.S.

His arrival in Washington follows Obama’s moves to reassert U.S. power and influence in the Asia-Pacific region and as China has emerged as one of the foreign policy issues in the U.S. presidential election campaign.

Republican presidential hopefuls have ramped up criticism of China on currency manipulation, intellectual property protection and for the hurdles the state sets up for U.S. businesses. They accuse Obama of not standing up enough to China’s rising economic and military power.

Bipartisan Commission

The chairmen of the bipartisan Congressional-Executive Commission on China today released a statement asking Xi to end a crackdown on dissidents that began a year ago, release all political prisoners and protect freedom of expression, religion and assembly. The co-chairmen, Representative Chris Smith, a New Jersey Republican, and Senator Sherrod Brown, an Ohio Democrat, also called on China to end currency manipulation and unfair trade practices.

At today’s luncheon at the State Department, Biden told Xi that China’s rise “did not occur in a vacuum” and was cultivated by an international system that is “grounded in rules” that all countries must follow.

During his meeting with Xi at the White House, Obama repeated the U.S. stance that China’s currency remains undervalued and that more progress must be made to let it rise, according to an administration official who wasn’t authorized to discuss the talks on the record.

China’s yuan hit 6.2884 per dollar on Feb. 10, the strongest level since the country unified the official and market exchange rates at the end of 1993. The yuan dropped 0.04 percent to close at 6.2996 per dollar in Shanghai, according to the China Foreign Exchange Trade System, amid concern that Europe’s slowing economies will cut purchases from China.

Trade Deficit

The U.S.-China trade deficit was $295 billion last year, $23 billion wider than a year earlier, and the imbalance is a main source of friction between the two countries.

Obama yesterday asked Congress in his next budget for $26 million and at least 50 people for a new panel to investigate unfair trade practices by China and other countries.

Biden said he and Obama brought Syria up with Xi in their meetings today. He also said the U.S. is concerned about worsening human rights conditions in China. “We see our advocacy for human rights as a fundamental aspect of our foreign policy,” Biden said.

Xi said China has made “tremendous” strides on human rights and that the government takes seriously people’s demands.

Lunch Guests

Guests at the lunch included Henry Kissinger, the former secretary of state and national security adviser to President Richard Nixon when the U.S. opened relations with China in the 1970s; Lloyd C. Blankfein, chairman and chief executive officer of Goldman Sachs Group Inc. (GS); John Watson, chief executive officer of Chevron Corp. (CVX); Robert Iger, chief executive officer of Walt Disney Co. (DIS); Jeffrey Katzenberg, chief executive officer of Dreamworks Animation (DWA); and Muhtar Kent, chief executive officer of Coca-Cola Co. (KO)

Xi’s agenda also includes meetings at the U.S. Chamber of Commerce in Washington and in Iowa and California later this week. Tomorrow he’ll meet with congressional leaders.

His trip may be most important for developing relationships between Xi and Washington’s military and political leaders that could shape U.S.-China relations for the next decade, said Obama administration officials and foreign policy specialists.

“In Asia, generally, but in China certainly, relationships matter, and high-level relationships particularly matter,” said Daniel Russel, senior director for Asian affairs on the White House National Security Council. “Building a relationship with the official in China who seems likely destined to be a central figure in the Chinese political system for years to come obviously is important.”

Strategic Concerns

While the economic relationship is most prominently featured in the domestic U.S. political debate, Obama’s other concerns include China’s role in putting pressure on regimes in Iran, North Korea and Syria.

As Xi visited the White House, Chinese Foreign Ministry spokesman Liu Weimin said at a briefing in Beijing today that China believes the most pressing task concerning the dispute over Iran’s nuclear program is to resume talks as soon as possible. Iran is willing to resume talks, Liu said, speaking after Assistant Foreign Minister Ma Zhaoxu visited Iran.

Obama used an Asia-Pacific trip last November to send signals that the U.S. was beefing up its military and diplomatic posture in China’s backyard and helping other Asian nations band together to make demands of China.

Russel and other White House aides said they didn’t expect major breakthroughs on this trip, in part because Xi isn’t yet China’s top official.

To contact the reporters on this story: Margaret Talev in Washington at mtalev@bloomberg.net; Dune Lawrence in Washington at dlawrence6@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

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