At the Asia-Pacific Economic Cooperation (APEC) Leaders Week, Chinese Commerce Minister Chen Deming met with U.S. Commerce Secretary John Bryson and Congressman Jim McDermott to discuss the trade deficit between China and the U.S. Chen said the Chinese currency's exchange rate is fine and changing it won’t solve the U.S. trade problems.

According to the China Iron & Steel Association (CISA) article, Chen said “China's import rate has been expanding far faster than its export rate in recent years, with its foreign trade surplus falling year by year and month by month, to merely 1.4 percent of the country's GDP. Since the establishment of the APEC forum, the two sides have been comparing notes and have arrived at the conclusion that the actual U.S. trade deficit with China was much lower than was previously announced by the United States, due to major differences in the tally of trade statistics between the two countries. China's surplus came almost exclusively from trading with the United States, and its trade with other countries and regions was generally balanced.”

Thus, Chen said changing the RMB exchange rate would not help the U.S. but that “China stands ready to increase imports from the United States in an effort to boost trade balance, but that the U.S. practice of putting many products on the controlled list has led to a loss of nearly 100 billion U.S. dollars in U.S. exports to China.”

According to CISA, Secretary Bryson said in his meeting with Chen, “that he supported Chinese firms' efforts to increase investment in the United States,” while McDermott “voiced his willingness to understand China better and said he expected that the two countries would get closer through broader consensus.”

However, President Obama had another view on the subject, saying that China's leaders need "to understand that their role is different now than it might have been 20 years ago or 30 years ago when, if they were breaking some rules, it didn't really matter, it didn't have a significant impact. Now they have grown up. They are going to have to help manage this process in a responsible way," according to a BBC News article. When Mr. Obama met with China’s President, he was blunt and told the public that China is guilty of "gaming the system" to the disadvantage of its trading partners. "We are going to continue to be firm that China operates by the same rules as everyone else, we don't want them taking advantage of the United States."

An official with China's foreign ministry responded to President Obama, saying, "If the rules are made collectively through agreement and China is a part of it, then China will abide by them. If rules are decided by one or even several countries, China does not have the obligation to abide by that."

Source: China Iron & Steel Association; BBC News