Obama says Washington not trying to contain China

By Patricia Zengerle and Jason Subler

BEIJING (Reuters) - U.S. President Barack Obama told Chinese students on Monday he did not fear their nation's rise, ahead of talks on trade imbalances and currency strains that underline the sometimes tense embrace between the two giants.

Testy exchanges between the world's biggest and third biggest economies have continued even after Obama began his first visit to China on Sunday. A Chinese government spokesman rebuffed calls for the yuan currency to appreciate, a step Obama has urged to correct imbalances in the global economy.

But the U.S. president held to a reassuring, sometimes folksy tone at a forum of students in Shanghai, with the mostly gentle questions providing little scope for political hardball.

"We do not seek to contain China's rise," he said before taking questions from the audience of several hundred students and also from the Internet.

"On the contrary, we welcome China as a strong and prosperous and successful member of the community of nations."

Obama also used the forum to champion Internet freedom and human rights on the first full day of his trip. But he did not mention Tibet or other sensitive issues that could have drawn ire ahead of his talks with Chinese leaders in Beijing, where he arrived later on Monday.

"These freedoms of expression and worship, of access to information and political participation, we believe are universal rights, they should be available to all people including ethnic and religious minorities," Obama told the audience in Shanghai.

"I'm a big supporter of not restricting Internet use," he said. "The more open we are, the more we can communicate and it also draws the world together."