Obama to meet China's Hu before G20 summit in Seoul

International concern at China is growing over its yuan exchange rate, which the Obama administration contends is grossly undervalued to boost Chinese exports.

Beijing is also facing accusations that it is using its near-global monopoly of rare earth minerals to bully neighbours in trade and diplomatic disputes. The meeting ahead of the November 11-12 Group of 20 major economies will be the 7th bilateral between Hu and Obama, deputy national security advisor Ben Rhodes said.

The Obama administration has delayed a controversial report on China's currency until after the G20 summit, averting for now a showdown between the two superpowers. Beijing pledged in June to allow limited currency reform, since when the yuan has risen less than three per cent against the dollar.

The US trade deficit with China ballooned to a new record in August, sharply widening the overall trade gap, according to official date released this month. And in another side of rising tensions over US-China trade, the House of Representatives last month passed a bill allowing the government to impose countervailing duties on imports from nations found to be manipulating their currencies.

In campaigning ahead of crucial mid-term elections next week, Obama vowed to take a firmer stance with developing nations like China and to drive a tougher bargain for American products.

Secretary of State Hillary Clinton left yesterday on a two-week Asia trip to pursue what an aide called "cool-headed, constructive diplomacy" with China amid worry from Asian nations over Beijing's growing clout.

With the stakes high over oil and other resources, China has taken more assertive stances toward an uninhabited island chain in the East China Sea and toward the Paracel and Spratly archipelagos in the South China Sea.

The uninhabited islands sparked a dispute with Japan and the archipelagos have raised tensions with southeast Asian nations like Vietnam.

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