It does also mean, though, that we have a level playing field when it comes to our trading partners. And so, with respect to China, what President Hu and myself and our delegations have discussed is how do we make sure that in fact our trading relationship is fair and a win-win situation as opposed to a win-lose situation.
Some of that has to do with issues completely unrelated to currency. For example, we’re making progress on making sure that the government procurement process in China is open and fair to American businesses. And we’ve made progress as a consequence of this state visit.
Some of it has to do with intellectual property protection. So we were just in a meeting with business leaders, and Steve Ballmer of Microsoft pointed out that their estimate is that only one customer in every 10 of their products is actually paying for it in China. And so can we get better enforcement, since that is an area where America excels -- intellectual property and high-value added products and services.
And the Chinese government has, to its credit, taken steps to better enforce intellectual property. We’ve got further agreement as a consequence of this state visit. And I think President Hu would acknowledge that more needs to be done.
But the currency issue is a part of the problem. The RMB is undervalued. The Chinese government has intervened very forcefully in the currency markets. They’ve spent $200 billion just recently, and that's an indication of the degree to which it’s still undervalued.
President Hu has indicated he’s committed to moving towards a market-based system. And there has been movement, but it’s not as fast as we want. And what I’ve said to President Hu -- and I firmly believe this -- is not will U.S. businesses be able to export more to China if we have a market-based currency, but it will also be good for China and President Hu’s agenda of expanding domestic demand. Because if the RMB is worth more, that means they can buy more products and services, and that will contribute to China have greater purchasing power and a higher standard of living.
So this is something that can be a win-win. President Hu is concerned understandably about how rapid this transition takes and the disruptions that may occur in its export sector. But I’m confident that it’s the right thing to do, and my hope and expectation is, is that President Hu’s resolve will lead to a fully market-based currency program that will allow more effective trade between our two countries.
Q (As translated.) Because of the on-and-off interpretation from the simultaneous booths, I would like to ask the Chinese consecutive interpreter to interpret my two questions correctly and accurately. (Laughter.)
My first question for President Obama: Many people do believe that the biggest problem in this relationship is the lack of strategic mutual trust. Do you agree with this view? And how do you think that the two sides should enhance their strategic mutual trust? And how do you think that the two sides should appropriately manage their differences and expand their common interests?
My second question is for President Hu Jintao. We’ve noted that both the Chinese and American leaders have on various occasions stressed the fact that the influence and significance of the China-U.S. relationship have gone far beyond the bilateral dimension. China and the United States share broad common interests and shoulder important common responsibilities in addressing a variety of regional and the global issues. So my question is, how do you think that the China and the United States can step up their cooperation in a joint endeavor to tackle the increasing number of global issues?
PRESIDENT OBAMA: Certainly, the more that we can build a baseline of trust -- as you called it, “strategic mutual trust” -- the more likely we are able to solve the friction or irritants that exist in a relationship between any two countries in a more constructive way -- which is why I think it’s so important that not only governments but people in both countries understand the challenges that each country faces and not view every issue through the lens of rivalry.
For example, I know that in China, many believe that somehow the United States is interested in containing China’s rise. As I indicated in the answer that I gave a previous questioner, we welcome China’s rise. We just want to make sure that that rise is done -- that that rise occurs in a way that reinforces international norms and international rules, and enhances security and peace, as opposed to it being a source of conflict either in the region or around the world.
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