Obama and Hu vow cooperation

(AP)

The United States and China unveiled $45 billion in export deals today as Presidents Barack Obama and Hu Jintao sought to paper over deep rifts about trade, currencies and security.

Amid the pomp of a state visit, Obama and Hu vowed to seek common ground as they launched talks aimed at easing the strains of the past year over North Korea, economic imbalances, human rights, Taiwan, Tibet and a host of other issues.

Welcoming Hu to the White House, Obama hailed the event as a chance to demonstrate that the world's two biggest economic powers "have an enormous stake in each other's success."

"Even as our nations compete in some areas, we can cooperate in others," Obama said at the choreographed welcoming ceremony. "Let us seize these possibilities together."

The two countries used the summit to unveil a series of deals, including China's purchase of 200 Boeing aircraft. US officials said the $45 billion in deals would support an estimated 235,000 American jobs.

Obama wants the visit to help highlight his efforts to boost the struggling US economy and cut unemployment that has been persistently above nine per cent.

Offering another tangible achievement, the United States and China plan to announce a deal to create a jointly financed security centre in China.

Obama and Hu were also due to attend a meeting of US and Chinese business leaders at the White House.

But in a major concern for US companies and politicians, Beijing has so far resisted demands for faster appreciation of its currency, the yuan, that would possibly help lower China's trade surplus with the United States, which Washington puts at $270 billion.

Gently raising China's human rights record, Obama said: "History shows that societies are more harmonious, nations are successful and the world is more just when the rights and responsibilities of all nations and all people are upheld, including the universal rights of every human being."

Hu said he had come to "enhance mutual trust" and open a new chapter in relations but signalled he would bristle at any effort to push China on its currency practices, human rights and other disputes that it deems to be domestic matters.

"China and the United States must respect each other's choices in development and each other's choices in development paths and each other's core interests," Hu said.

Hu was greeted with a 21-gun salute, honour guards and the playing of both national anthems in a show meant to convey recognition of China's growing international stature.

The ceremony went off without a hitch. The last time Hu came to Washington, in 2006 during the Bush administration, the arrival ceremony was marred by heckling from a protester from the Falun Gong spiritual sect who had infiltrated the event.

But while handshakes and smiles set a positive atmosphere, the red-carpet treatment was not expected to make it any easier to achieve breakthroughs in today's talks or even narrow differences significantly.

Some in Washington and Beijing are treating the summit as a gauge of how well the two powers can work in concert as China's ambitions expand in line with its rapid economic growth.

US Secretary of State Hillary Clinton called for more cooperation from China in dealing with North Korea's nuclear programme and "provocative behavior." She also said the Obama administration was pressing Beijing "very hard to gets its entities into compliance" with UN sanctions on Iran.

Hu has been reluctant to give ground to US demands to intensify pressure on China's ally, North Korea, to abandon its nuclear ambitions. North Korea recently caused alarm by shelling a South Korean island and claiming advances in uranium enrichment that could boost its nuclear weapons capability.

US politicians, who will host Hu tomorrow, are impatient for results about China's economic policies. A meager outcome at the summit could raise congressional pressure on Beijing over the trade deficit and the way it manages the yuan.

A group of 84 politicians urged Obama in a letter today to tell Hu that "America's patience is near an end" over China's failure to play by trade rules.

Obama wants to show he is serious about leaning on China for concessions that could boost the anemic US recovery and reduce unemployment - both seen as crucial to his chances of re-election in 2012.

Obama's challenge to China's human rights comes after critics at home accused him of being too deferential on the issue in his 2009 visit to Beijing.

Hu was likely to raise his worries about US economic and security policies, including arms sales to Taiwan, the self-ruled island that China deems a breakaway province.

The arms sales to Taiwan, even at the time when cross-Strait relations are improving, is the single most important factor jeopardizing US-China military ties, Major-General Yao Yunzhu, a senior military researcher, wrote in the official China Daily today.

Beijing also wants the Obama administration's reassurances that China's big holdings of US government debt are not threatened because of what some critics describe as loose US fiscal policies.