China's Wen seeks to reassure Obama on trade

By Caren Bohan and Patricia Zengerle

BEIJING (Reuters) - Chinese Premier Wen Jiabao told President Barack Obama his nation does not seek a trade surplus with the United States and wants to balance flows, striking a conciliatory note but avoiding public comment on currency rifts.

Wen made the comments on Wednesday during a meeting with the U.S. President, according to a report on the Chinese Foreign Ministry website (www.mfa.gov.cn).

"China does not pursue a trade surplus," Wen said, adding that his government wants "to encourage a steady balancing of bilateral trade."

"Lively global trade and investment will help to overcome the international financial crisis and accelerate global economic recovery," said the Chinese Premier, also urging both countries to "together oppose trade and investment protectionism."

Wen's comments are unlikely to mollify U.S. industry groups and politicians who say Beijing is holding its yuan currency so low against the dollar that it is stoking a U.S. trade deficit with China and worsening global economic imbalances.

But Wen's reassuring language, as well as praise for Obama in Chinese state media, set a guardedly upbeat tone at the end of a four-day visit that exposed rifts over trade and currency policy.

"The West's perception of China has been changing gradually, and a positive turn has occurred as Obama has said more than once during his ongoing Asia tour that the United States would not seek to contain China's rise but welcome China as a strong and prosperous player in the community of nations," said a commentary issued by the official Xinhua news agency.

Obama's words "forged a good starting point to further Chinese-U.S. ties", it said.