Obama says Washington not trying to contain China

By Caren Bohan and Patricia Zengerle

SHANGHAI (Reuters) - U.S. President Barack Obama said he was not seeking to contain China's rise and called for more balanced trade between the two powers, which have sparred over currency and economic policy ahead of a summit.

Obama also used a town hall-style meeting in Shanghai on Monday to champion Internet freedom and human rights on the first full day of his first trip to China, but he did not mention Tibet or other sensitive issues that could have stoked ire ahead of his talks with senior officials in Beijing.

The U.S. president struck a genial note after days of swipes between the two sides over trade imbalances and China's yuan currency, which many in Washington say is so under-valued that it is warping the global economy.

"We do not seek to contain China's rise," he said before taking questions. "On the contrary, we welcome China as a strong and prosperous and successful member of the community of nations."

While billed as an opportunity for Obama to reach out to the Chinese public, the meeting bore the markings of a scripted but friendly encounter. Students dressed in suits smiled and applauded politely, and laughed when he tried Chinese.

Obama used the occasion to call for human rights and greater transparency on the Internet, which is heavily censored in China.

"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.

"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."