Obama Claims Xi Promised Not To Devalue RMB

Chinese President Xi Jinping has arrived in Washington for a state visit during which discussions will turn to various sources of tension.

Chief among the concerns for President Obama are the threat of a further devaluation of Chinese currency, cyberspace theft of intellectual property from U.S. companies, and the formation of mechanisms to avoid conflict.

China's Currency Devaluation Obama

Obama – No currency devaluation, more cooperation on cyber security

The two leaders spoke alongside each other in the Rose Garden on Friday, and Obama told guests that Xi promised not to devalue Chinese currency. The pair also agreed to “a common understanding on the way forward” on the issue of cyberspace theft, with both agreeing not to condone or sponsor any such activities.

Rumors of further currency devaluation have caused uncertainty in the world economy, with Xi’s announcement calming the rumor mill. The promise should go some way to putting Western minds at rest after a period of great volatility in China.

Although progress was announced on certain issues, other problems remain. Obama said that “candid conversations” between the two would “help us understand each other better,” but certain sources of tension remain.

Obama and Xi – Much to discuss for two world leaders

Obama claimed that specific cases of cyber crime were not addressed, but he told Xi that individuals and companies implicated in the stealing of trade secrets could be subject to sanctions. A series of hacks, including the stealing of data on millions of federal employees, have raised suspicions that China is building a huge database of information on American citizens.

China’s building programs in the South China Sea have also had a negative impact on relations, and many fear that Beijing may attempt to restrict freedom of movement in the vital shipping lanes. Obama said “the United States will continue to sail, fly or operate anywhere international law allows.” For his part Xi did not promise to stop building work, but he did claim that “China does not intend to pursue militarization.”

Obama also called for China to take greater “responsibility” now that it had become a global “powerhouse.” It must be hoped that the two leaders can make real progress towards reaching agreements on areas of potential conflict in the days to come.

“I believe our two great nations, if we work together have an unmatched ability to shape the century ahead,” Obama said.