Hu Jintao resists US pressure on RMB exchange rate

President Hu Jintao defended China’s exchange-rate policy during a meeting with US president Barack Obama at the Asia-Pacific Economic Cooperation (APEC) forum in Honolulu, The Wall Street Journal reported. President Hu said that the trade deficit and unemployment issues in the US are structural and would not be helped by a rise in the renminbi. China’s tight control of the renminbi exchange rate has become a key issue in Washington, with Congress and Republican presidential hopefuls arguing that the currency is artificially undervalued, negatively effecting the US economy. The International Monetary Fund also maintains that the renminbi is undervalued, although recent economic data has weakened this view. Export growth has slowed for the past two months, as has inflation. Both would be a disincentive for RMB appreciation, as Chinese policymakers may be more concerned with protecting exporters as global demand slows and feel less pressured to offset rising consumer prices.