President George W. Bush failed to win a commitment from Chinese President Hu Jintao on Thursday on immediate steps to reduce China's $202 billion trade surplus with the United States.
Hu did give Bush a general assurance he was working to make the Chinese currency more "flexible" but this fell far short of U.S. demands for a dramatic revaluation of the yuan as a way to make U.S. products more competitive in Chinese and global markets and reduce the trade imbalance.
The two leaders also failed to bridge differences over how to deal with Iran's nuclear ambitions. Bush wants China to agree to tougher UN Security Council action, but his arguments did not persuade Hu.
Speaking in the Oval Office, the two leaders said their bilateral relationship had matured and they could discuss differences openly. "He tells me what he thinks, and I tell him what I think, and we do so with respect," Bush said.
On a long-awaited visit to the White House, Hu received the 21-gun salute and full military honors the Chinese had coveted as a sign of respect.
But in an embarrassing episode that marred the South Lawn ceremony and created a diplomatic stir, a Chinese woman on a press camera platform
U.S. officials were annoyed by the interruption.
Talks between Bush and Hu began in the Oval Office, spilled into the Cabinet Room and continued during a formal luncheon when they broke protocol and sat next to each other so they could keep talking.
Covering human rights concerns, Bush complained about China's recent expulsion of a North Korean woman seeking asylum.
U.S. national security adviser Stephen Hadley told Reuters China appears willing to resolve three of six-long standing human rights cases after Hu returns home. "We think we're going to make progress on three of them," he said, while declining to describe them in detail.
In a rarity, Hu answered reporters' questions in the Oval Office and U.S. officials saw progress in the communist leader's comment that "if there is no democracy, there will be no modernization" of China.
Stating that China wanted to boost its domestic demand and did not seek an excessive trade surplus, Hu vowed to do more to stop the illegal piracy of American-made software and DVDs, but said Washington could help reduce the imbalance by allowing more high-tech exports to China.
Bush, under pressure to reduce last year's $202 billion trade deficit with China, said he hoped China would do more to revalue its currency, the yuan, which Washington considers seriously undervalued against the dollar.
'TIGER, NOT PUSSYCAT'
Hu said China would continue to improve the yuan's exchange rate, although he gave no specifics. But on Wednesday, he ruled out any dramatic revaluation of the currency.
Wilder of the National Security Council said "we're disappointed with how slowly they moved" on the currency issue but cautioned reporters that immediate steps had not been expected.
"Some people today want to see a quick fix to the trade imbalance. And if there was one, believe us, we would have tried to get that by now with the Chinese," said Wilder.
Democrats said Hu offered no tangible progress on trade and that Bush was not tough enough.
"America needs a tiger, not a pussycat, fighting for our American companies and American workers," said Michigan Gov. Jennifer Granholm, whose state has been hard hit by job losses.
