Chinese President Hu Jin-tao (
In a nearly one-hour summit on the sidelines of a major Asia-Pacific conference, Bush and Hu discussed the exchange rate and record growth in US-China trade, He Yafei (
"We will continue to push forward the reform on the yuan exchange rate, while maintaining overall stability in our economy," Hu was quoted as telling Bush ahead of the Asia-Pacific Economic Cooperation forum talks.
The Chinese leader thanked Bush for resisting calls by some US lawmakers and business leaders for trade sanctions on China over the yuan-US dollar peg, the official said.
For its part, the US appeared content with Hu's commitment to move on the yuan peg, despite the lack of specifics over when and how China would implement the move.
"It was a clear commitment, but it was not a commitment that got into the tactics of how, exactly, they would move towards what President Hu said they would do, which is, you know, a flexible exchange rate that reflects the market factors," a senior US administration official said .
Many US exporters complain that the yuan is undervalued at about 8.3 to the US dollar, giving China an unfair advantage by making Chinese exports cheaper and other countries' exports to China more expensive.
With the fall of the US dollar, the value of the Chinese yuan is also declining, sharpening its competitive edge. The US dollar fell to as low as ?102.92 in late European trading, the lowest level since April 2000. Meanwhile, the euro scaled a peak of US$1.3067, flirting with a record-high US$1.3074 seen on Thursday.
China indicated on Friday that it would not move on yuan reform until the US dollar slide had stabilized.
"As a major country having ownership to the most important currency in the global economy, I think the United States has the responsibility -- as much responsibility as do the others -- to act, to take the necessary actions to restore equilibrium in the currency market," said Wang Xiao-long, a senior foreign ministry official in charge of economic affairs.
"We will wait and see [on yuan reform] ... We haven't seen the reaction of some of the other players and we will have to see what the impact of the recent fall of the dollar will be on the world economy," he said.