Presidents fall out over money

China's president, Hu Jintao, yesterday rejected a personal appeal from his American counterpart, George Bush, to revalue his country's currency and adjust other policies that Washington claims give China an unfair trading advantage.

Mr Hu declined to discuss the issue after the two men met during a summit of Pacific rim leaders in Bangkok and instead stressed the positive aspects of the conversation.

"We stated our readiness to resolve whatever questions that might emerge in our economic exchanges and trade through dialogue," he said, adding that they had agreed "that the economic cooperation and trade between our two countries have benefited our two peoples tremendously".

Washington believes the renminbi, pegged at 8.28 to the US dollar, is undervalued by as much as 40%, making Chinese exports much cheaper and costing America manufacturing jobs. Some US legislators are urging Mr Bush to take the matter to the World Trade Organisation while others want Beijing's special trading privileges revoked.

Mr Bush also did not refer to the dispute. He said the presidents discussed the "need to make sure that trade is open and that both countries benefit from trade".

Earlier in the day, speaking at a business leaders' meeting occurring in tandem with the summit, Mr Hu was much more belligerent.

He said it would be "irresponsible" to alter China's currency policy and said that, considering his country's growth rate, "it is quite normal for some frictions and some disputes to occur in the areas of trade".

The Chinese government reported on Friday that its economy grew by 9% in the 12 months to the end of September, more than three times that rate of most industrialised nations. Officials predicted the rapid expansion would continue for at least another quarter.

Mr Hu said yesterday such growth was a "win-win outcome" for the world. "China has a huge market of 1.3bn people to offer to the world. China also offers much business opportunity to multinationals in the whole world."

Keeping the renminbi stable "serves Chinese economic performance and conforms to the requirements of economic development in the Asia-Pacific region and the whole world", said Mr Hu, attending his first major international summit.

"We will maintain the basic stability of the renminbi exchange rate at a reasonable and balanced level."

The head of the WTO, Supachai Panitchpakdi, yesterday took Mr Hu's side: "China's commitments are huge commitments. Simply for that, China will need some time."