President Hu: US woes not yuan-related

HONOLULU / BEIJING - The exchange rate did not cause structural problems in the US economy, such as the trade deficit and unemployment, President Hu Jintao said during a meeting on Saturday with US President Barack Obama.

China follows a responsible exchange rate policy, Hu told Obama as the two leaders met during the Asia-Pacific Economic Cooperation summit in Hawaii.

China will steadily advance the reform of the exchange rate mechanism, Hu said, with the goal of ensuring a market-based and managed floating exchange rate system that is tied to a basket of currencies.

Stressing that the exchange rate is not to blame for US structural problems, Hu warned that even an abrupt yuan appreciation could not solve the problems the US is facing.

Instead, Hu said, the US should loosen export controls on high-tech products to China and make it more convenient for Chinese firms to invest in the US.