On the campaign trail, President Barack Obama said China is manipulating the value of its currency. So, during a recent diplomatic trip to the country, Obama took the first steps to put an end to the practice.
"Currency, along with a host of other issues, will come up, and I"m confident that both the United States and China can arrive at a broad set of policies that encourages trade that benefits both countries, that allows ongoing economic growth,” Obama told Reuters in an interview shortly before his trip.
U.S. business leaders and officials have long complained that China is pegging the value of its yuan too low against the dollar, which has led to a massive trade deficits between the two countries. In September, the monthly deficit peaked at $22.1 billion, the highest since November 2008.
Obama spoke with Chinese officials about the issue during his trip, according to White House officials.
Obama "underscored the importance of both countries pursuing strategies consistent with strong, balanced, sustainable growth that involves certain actions on the U.S. side and certain actions on the Chinese side," deputy national security adviser Mike Forman told reporters. Obama specifically reminded Chinese officials of previous statements they've made regarding the yuan, Forman said.
"It was very much on the agenda," Forman said.
But Chinese Prime Minister Wen Jiabao appeared to skirt the issue; he made no promises, saying during this round of meetings that China wants to "encourage a steady balance of bilateral trade," according to a Reuters report. Indeed, strengthening the yuan would make Chinese exports less competitive. Already exports for the country are down about 20 percent from last year.
So, Obama brought up the issue of increasing the value of the yuan during his trip to China, which merits a move to In the Works for this promise. However, Chinese officials appear to be resisting his efforts, so we'll be watching this one to see if Obama makes any further progress.